What aspect of insurance does the term 'excess and surplus lines' refer to?

The term 'excess and surplus lines' specifically refers to coverage that is designed for high-risk or unique situations. This type of insurance is typically utilized when the risk being insured cannot be adequately covered by standard insurance policies due to unusual characteristics, high risk, or unique needs of the insured party.

Excess and surplus lines insurance allows insurers to provide coverage that is not typically available in the admitted market, which is the standard insurance market regulated by the state. This flexibility allows insurers to underwrite risks that fall outside the conventional norms and standards, enabling them to serve niche markets effectively.

Thus, the primary focus of excess and surplus lines is on addressing specialized risks that require tailored underwriting approaches, which are common in industries like construction, aviation, and certain types of manufacturing. This makes it a critical component of risk management for entities that face unique challenges not addressed by standard insurance offerings.