What is typically required from clients seeking surplus lines coverage?

Clients seeking surplus lines coverage must typically demonstrate that a standard insurance policy has been rejected. This requirement serves to justify why surplus lines coverage is necessary. Surplus lines insurance is designed for unique or high-risk situations that standard insurance policies do not adequately cover. To access these alternative policies, it is essential that clients first attempt to secure coverage through traditional avenues and face rejection.

This practice protects the integrity of the surplus lines market by ensuring that it serves as a secondary option meant for those risks that truly cannot find adequate standard coverage. By proving this step of rejection, clients also confirm that they have explored all avenues available to them within the regulated market before turning to surplus lines, which may not be subject to the same regulations and protections as standard markets.

Other potential answers may misrepresent the requirements or conditions surrounding surplus lines coverage, such as suggesting that clients don’t need to prove anything or must reside in specific states, which do not align with typical industry practices.