What is "excess and surplus lines" insurance?

Excess and surplus lines insurance refers specifically to coverage for risks that are not commonly found in the standard insurance market. This type of insurance is designed for unique or high-risk situations that traditional insurers may avoid due to increased potential for loss or because the risks do not fit established underwriting criteria. For example, businesses in emerging industries or those with unusual exposures may seek excess and surplus lines coverage to ensure they have adequate protection.

The essence of excess and surplus lines is their flexibility in terms of underwriting and policy structure. This allows insurers to offer tailored solutions for specialized needs, which standard insurers may not be willing or able to provide.

In contrast, options that describe insurance for clients with excellent coverage histories or standard market coverage with typical limits do not accurately reflect the risks addressed by excess and surplus lines. Additionally, stating that this insurance can only be obtained through government programs fails to capture the private sector's role in offering these specialized coverages. Thus, the concept of excess and surplus lines is ultimately about accommodating the unique needs of risks that lie outside conventional coverage offerings.