Why does surplus lines business often have a negative image?

Surplus lines business often has a negative image primarily because it is not well understood by the general public and represents a relatively small part of the overall insurance marketplace. This lack of familiarity can lead to misconceptions and apprehensions regarding its purpose and function.

Surplus lines insurance provides coverage that is not available in the standard market, often for unique or high-risk scenarios that standard insurers are unwilling to cover. Because the specifics of this type of insurance are less widespread in consumer discourse and education, there can be a perception that it is less reliable or even risky, despite fulfilling important roles in providing insurance solutions for atypical risks.

While factors such as higher premiums and its common association with high-risk clients contribute to the complexity surrounding surplus lines, the core issue lies in its limited understanding among consumers and insurers alike. Consequently, this perception can detract from the advantages that surplus lines can offer to those needing specialized coverage.