What type of policy forms are usually utilized in surplus lines insurance?

Surplus lines insurance is characterized by its flexibility and ability to underwrite unique or high-risk insurance needs that standard market carriers may not cover. Customized policy forms are typically utilized in this context because they allow insurers to tailor coverage specifically to the individual risk characteristics of the insured. This customization can address unique exposures or specific requirements that standard policies might not adequately cover, thus providing a more targeted risk management solution.

In contrast, standardized policy forms are more rigid and do not allow for modifications to suit specific risks, which often limits their applicability in surplus lines where unique risks are prevalent. Government-mandated policy forms may serve specific regulatory requirements, but they are less common in surplus lines, where the emphasis is on agility and tailored solutions. Universal policy forms suggest a one-size-fits-all approach, which contradicts the very essence of surplus lines insurance that thrives on customization to meet special risk scenarios.