Which of the following describes a characteristic of surplus lines coverage?

Surplus lines coverage is specifically designed to address the unique needs of risks that are not typically accepted by standard insurance markets. This is why it often involves higher-risk factors. Surplus lines insurers are willing to underwrite these risks because they specialize in insuring difficult or unconventional exposures that traditional insurers are unable or unwilling to cover.

These higher-risk factors can include various industries or activities with a history of claims, emerging businesses with untested models, or any other non-standard situations that do not fit the underwriting criteria of conventional insurance companies. This characteristic is crucial in understanding the role of surplus lines in the insurance landscape, as it fulfills a vital market need for coverage that would otherwise go uninsured.

In contrast, the other options are less accurate. For instance, surplus lines are obtained from non-admitted insurers, meaning they are not regulated in the same way as standard coverage, but they are not limited to government agencies. Additionally, surplus lines coverage is not necessarily more affordable; it can often be more expensive due to the higher risk involved, and while it may be less regulated, that does not inherently make it cheaper.