What are Surplus Lines in insurance?

Surplus lines refer to a category of insurance that is typically not available through the standard or admitted market. Admitted insurers are those that have been licensed by the state and have to comply with specific regulations, including rate approvals and policy forms. When there is no readily available coverage from an admitted insurer—perhaps because the risk is unusual, high, or otherwise not acceptable to traditional insurers—surplus lines come into play.

Surplus lines insurers are often non-admitted, meaning they can write policies without being subject to the same regulatory constraints as admitted insurers. This allows them greater flexibility to cover unique or hard-to-place risks that would not otherwise be insurable under standard insurance products. Thus, the essence of surplus lines insurance is its role in providing coverage for those situations where standard insurance is simply not available, making option B the correct choice.