Why might an insured choose surplus lines insurance?

An insured might choose surplus lines insurance primarily to obtain coverage for unique risks. Surplus lines insurance is specifically designed to cover situations or risks that standard insurance markets are either unwilling or unable to underwrite. This can include non-traditional businesses, specialized professions, or unique events that don’t fit the criteria of conventional policies.

For instance, if a business operates in a niche market with high-risk factors that are not typically covered by standard insurers, they would turn to surplus lines to secure the necessary protection. This option provides flexibility and access to tailored insurance solutions that address specific exposures.

The other options do not accurately reflect the reasons for selecting surplus lines. For example, surplus lines insurance does not generally appeal to those looking to avoid premiums, as they still have to pay for the coverage they receive. Additionally, while surplus lines may offer certain efficiencies, the focus is more on coverage for risks than on simplifying processes. Lastly, there is no guarantee of payment for all claims in any insurance type, including surplus lines, as claims are subjected to policy terms, conditions, and coverage limitations.