What is often a misconception about surplus lines insurance?

Surplus lines insurance is often misunderstood, particularly regarding its association with high-risk businesses. While it is true that surplus lines are typically used for risks that standard insurers are unwilling to insure, this does not mean that it is exclusively for high-risk operations. Many businesses may pursue surplus lines insurance for unique or specialized coverage needs that fall outside of what traditional insurance companies offer, even if they do not fall into the "high-risk" category.

This misconception arises because surplus lines are frequently utilized for unusual or hard-to-place risks, leading to the belief that they are only relevant to high-risk operations. However, surplus lines markets can provide coverage for a variety of businesses, including those that are perfectly safe but require specialized coverage terms or limits. By understanding that surplus lines can offer solutions beyond just high-risk cases, insureds can appreciate the broader role these products play in the insurance marketplace.