What is a "surplus lines insurance" policy?

A "surplus lines insurance" policy is specifically designed for risks that cannot be placed with standard market insurance carriers. This typically includes unique or high-risk exposures that fall outside the underwriting guidelines of regular insurers. Surplus lines insurers, which are often non-admitted carriers, have more flexibility in their underwriting criteria and can cover specialized or unusual risks that may not fit the traditional insurance model.

The other options represent aspects that do not accurately capture the essence of surplus lines insurance. For instance, standard insurers deal with more conventional risks and follow stricter regulatory guidelines, making them unsuitable for the types of risks covered by surplus lines. Additionally, surplus lines insurance does not inherently promise lower costs compared to standard policies; costs can vary widely based on the nature of the risk being insured. Finally, surplus lines insurance is not restricted solely to corporations, as it can also serve individuals and various entities needing coverage for unique or high-risk situations.