When should agents recommend surplus lines insurance to clients?

Agents should recommend surplus lines insurance to clients primarily when traditional markets cannot provide the necessary coverage. Surplus lines insurance is specifically designed to fill gaps in the insurance market where standard insurers may not offer policies. This can occur for various reasons, such as the unique risks associated with certain industries or high-risk activities that exceed the underwriting guidelines of admitted carriers.

By directing clients to surplus lines options, agents are effectively addressing specific insurable needs that cannot be met through conventional insurance providers. This is essential for ensuring clients receive the protection they require, especially in situations where traditional coverage may be unavailable or inadequate.

Clients seeking lower premiums, those with high-risk profiles, or those who may only request surplus lines insurance specifically might not necessarily be the best indicators for recommending this type of insurance. Instead, the key determinant should always be the inability of the traditional markets to provide appropriate and sufficient coverage. This highlights the role of surplus lines as a vital component of the overall insurance landscape, ensuring that even those with unique or challenging coverage needs can find appropriate solutions.