Which type of insurance is typically excluded from surplus lines coverage?

Surplus lines insurance generally refers to coverage that is not available from admitted insurers and is often used for high-risk or unique situations that standard insurance cannot accommodate. Certain types of insurance are typically excluded from surplus lines coverage because they are regulated differently or have specific provisions in place.

Workers' compensation insurance is one of those types that is typically not offered as surplus lines coverage. This is largely due to the fact that each state has a mandated workers' compensation system that provides specific benefits to employees who are injured or become ill as a result of their job. Since this is a highly regulated market with established guidelines and requirements, states require that workers' compensation coverage be provided through licensed, admitted carriers to ensure that policyholders meet all state regulations.

This makes the option regarding workers' compensation the correct choice, as it is not a type of coverage usually found in the surplus lines market, where the focus is on non-standard risks not appropriately handled by admitted insurers. In contrast, health insurance, auto insurance, and property insurance can often be provided through surplus lines if conventional market options are inadequate or unavailable for particular risk profiles.