What type of risk is most likely to require surplus lines insurance?

Surplus lines insurance is specifically designed to provide coverage for risks that are not typically covered by standard insurance markets due to their unique, unusual, or high-risk nature. High-value properties often fall into this category because they may exceed the coverage limits or underwriting criteria of standard insurers. These properties might have unique features or risks that make them more difficult to insure through traditional means, such as luxury homes, historic buildings, or properties in high-risk areas.

When an individual or business owns a high-value property, standard insurance coverage may not adequately protect against potential losses, entailing the need for surplus lines insurance to fill that gap. Insurers in the surplus lines market are willing to take on these higher-risk situations, which is why this type of insurance becomes necessary for such cases.

In contrast, standard home insurance, general liability insurance, and basic auto insurance are typically offered by conventional insurance companies and cater to more common, lower-risk scenarios that fall within standard underwriting guidelines. As a result, these options do not generally require surplus lines insurance.