Which types of risks are most commonly placed in the surplus lines market?

The surplus lines market primarily deals with risks that are typically more complex or challenging to insure in the standard insurance market. These are often high-risk situations that standard insurers may not cover due to their potential for significant financial loss or because they do not fit into their underwriting guidelines.

Environmental hazards and high-risk construction projects exemplify the types of risks that surplus lines insurers are more willing to accept. These types of risks often involve unusual exposures or specialized coverage needs that require tailored insurance solutions.

Unlike standard homeowners or auto insurance, which are commonplace and generally considered low risk for insurers, or low-risk liability and workers' compensation, which can often be written in the standard market, the risks associated with environmental hazards and high-risk construction projects tend to fall outside conventional underwriting criteria.

Additionally, while commercial property insurance is often placed in surplus lines, it is not the exclusive type. Therefore, focusing on more hazardous types of coverage such as environmental and high-risk construction illustrates the unique role of the surplus lines market in providing insurance solutions for less predictable and unconventional risks.