Excess Liability Insurance

A Commercial Excess Liability Insurance policy, also known as Excess Liability, acts as an extra layer of protection for your business beyond the limits of your primary liability insurance policies.

Here's a breakdown of how it works:

Imagine this:

• You have a General Liability (GL) policy with a limit of $1 million.
• Unfortunately, a major incident occurs, resulting in damages exceeding $1 million.
• Your primary GL policy covers its limit of $1 million, but you're left responsible for the remaining sum.

This is where an Excess Liability policy comes in. It picks up where your primary policies leave off, covering the difference between the primary policy's limit and the total cost of the claim. So, in the above scenario, if you had an Excess Liability policy with a limit of $5 million, it would cover the remaining $4 million (up to its limit) of the claim, protecting your business from significant financial losses.

Key Points:

• Doesn't replace primary insurance: You must have underlying primary liability policies (e.g., General Liability, Auto Liability, Employer's Liability) for Excess Liability to work.v
• Higher coverage limits: Provides significantly higher coverage limits compared to primary policies, offering peace of mind for larger potential claims.
• Cost-effective protection: Compared to increasing limits on primary policies, Excess Liability can be a more cost-effective way to achieve higher coverage.
• Tailored coverage: Can be customized to cover specific gaps in your primary policies or extend protection to broader liabilities.

Who needs it?

• Businesses with high-risk operations or potential for large lawsuits.
• Companies with valuable assets or intellectual property to protect.
• Businesses seeking broader liability coverage beyond standard primary policies.

Things to consider:

• Cost vs. Coverage: Weigh the premium cost against the increased protection and potential financial security it offers.
• Underlying policies: Ensure your primary policies have adequate limits before considering Excess Liability.
• Exclusions: Understand any exclusions in both your primary and Excess Liability policies to avoid coverage gaps.
• Claims history: A good claims history can lead to lower premiums.

Consulting with an insurance professional is crucial to assess your specific needs, risks, and existing coverage. They can help you determine if Excess Liability is right for your business and recommend suitable coverage limits and terms. Remember, having the right insurance in place can be critical in protecting your business from financial devastation due to unforeseen events and costly lawsuits.