What is a primary reason for using surplus lines insurance?

The primary reason for using surplus lines insurance is to access coverage for risks that admitted insurers do not insure. Surplus lines insurance provides a solution for unique or high-risk situations that standard insurance markets typically avoid due to the associated risks or lack of available coverage. This can include specialized businesses, unconventional products, or new ventures that do not fit within the underwriting guidelines of admitted insurers.

In many cases, surplus lines insurers operate outside the regulation of state insurance agencies, allowing them flexibility in their underwriting processes. This capability enables them to provide coverage for risks that cannot be addressed by standard market policies. Consequently, businesses and individuals needing such specialized coverage turn to surplus lines carriers for access to necessary insurance products.

The other choices, while connected to the insurance marketplace, do not align with the primary motivation behind surplus lines insurance. For instance, fulfilling mandatory state insurance requirements generally pertains to admitted insurers who must comply with state regulations, and lower premiums or an increase in the number of licensed producers are not direct purposes of seeking surplus lines coverage.