Which risks might be excluded from surplus lines insurance policies?

Surplus lines insurance is typically utilized for unique or high-risk situations that standard insurers may not cover. While it provides coverage for many types of risks, there are certain exclusions that are commonly included in these policies.

The correct choice accurately identifies that certain natural disasters and war are among the risks that might be excluded. Insurance policies often have specific exclusions related to catastrophic events such as hurricanes, earthquakes, floods, and acts of war or terrorism because the potential for loss is significantly higher in these scenarios. Insurers may avoid these risks to maintain solvency and manage their exposure more effectively.

Other options do not generally represent typical exclusions found in surplus lines policies. Common liabilities and health risks are usually covered within specialty insurance lines rather than excluded. Minor property damage, while it may not be the primary focus of surplus lines, is less likely to be explicitly excluded. Losses due to negligence are often covered, especially in certain types of liability insurance, although they can be limited in scope depending on the specific terms of the policy.

Thus, the inclusion of certain natural disasters and war as exclusions reflects the underwriting practices associated with managing high-risk insurance and upholding the financial stability of the insurance provider.