What is the primary function of a surplus lines broker?

The primary function of a surplus lines broker is to place insurance for high-risk situations. Surplus lines brokers specialize in securing coverage for risks that are not typically covered by standard insurance markets. This can include unique, complex, or non-standard risks where traditional insurers might be unwilling or unable to provide coverage. These brokers have access to non-admitted carriers, which are insurance companies that are not licensed in a given state but can operate there by providing coverage for these hard-to-place risks. This role is crucial in ensuring that businesses and individuals with atypical insurance needs can obtain the necessary coverage, thus filling a gap in the traditional insurance market.

In contrast, regulating insurance standards pertains to the role of state insurance departments, while preventing unlicensed insurance sales relates to compliance issues. Offering claims processing assistance is typically a function handled by insurance companies or adjusters rather than brokers themselves.