Which of the following best describes surplus lines insurance?

Surplus lines insurance is specifically designed to cover unique, high-risk, or unusual exposures that standard insurers typically do not underwrite. This could include specific types of businesses, industries, or even certain geographic areas that present unique risks. Because these risks are less common and not typically covered by standard market policies, surplus lines insurance fills an important gap by providing coverage options for situations where the regular insurance market cannot.

The other options do not accurately represent surplus lines. Licensed standard insurers are not the source of surplus lines coverage, as it is provided by non-admitted insurers who do not have to adhere to the same regulations as admitted insurers. Additionally, surplus lines insurance does not necessarily imply that it is cheaper than standard lines; pricing depends on the specific risk being insured. Lastly, surplus lines can cover a variety of risks beyond just residential properties, including commercial and industrial risks.