Which types of insurance contracts typically require surplus lines coverage?

Surplus lines coverage is specifically designed for unique, high-risk businesses or situations that are not adequately covered by standard insurance policies. This can include industries that are considered too risky or have unusual exposure to loss, such as certain types of high-hazard construction, specialized manufacturing, or entertainment ventures. Traditional insurance markets may refuse to underwrite such risks due to their complexity or potential for high severity, which is where surplus lines come into play.

Surplus lines insurers have more flexibility in their underwriting processes and can offer coverage that better fits these distinctive needs. This makes the option involving unique or high-risk businesses the accurate choice regarding types of insurance contracts requiring surplus lines coverage, as traditional carriers typically lack the ability or willingness to provide necessary protection in these scenarios.

The other options do not align with the nature of surplus lines. Personal insurance policies generally fall within the regular market; contracts under $1 million might still be insurable through standard markets; and standard policies for small companies typically do not require surplus lines unless there are unique risk factors involved. Thus, option B stands out as the most relevant and correct choice.