What Is Commercial Excess Liability Insurance?
An excess liability insurance policy provides coverage limits in excess of an underlying liability policy. Put another way, excess liability policies “drop-down” to replace primary coverage when limits on the primary policy have been exhausted. This type of coverage often matches the exact terms of the primary policy or policies. However, an excess liability insurance policy can also be more restrictive and include more exclusions than primary policies. It should be noted that excess liability insurance only offers additional limits to the primary insurance policy and will not protect a business if there is no primary policy already in place.
What Is Umbrella Insurance?
Umbrella insurance, like commercial excess liability insurance, provides coverage for claims exceeding the primary policy’s limits. However, this type of policy can offer broader coverage for losses outside of those outlined within the primary policy or policies.
Key Differences
While umbrella and excess liability insurance are both types of secondary insurance that function nearly the same, there are a few notable differences. The most significant difference between the two is that umbrella insurance can broaden coverage and apply to losses not covered by the primary coverages that are in place. In contrast, excess insurance only extends the limits of liability of the primary policy or policies.
Conclusion
Umbrella and commercial excess liability insurance policies add critical protection layers to primary insurance policies. These coverages can protect your business from catastrophic losses exceeding your liability policy’s coverage limits and reduce the chance that a lawsuit or other claim could bankrupt your business. When costs for insurance settlements and jury verdicts frequently reach millions of dollars, umbrella and excess liability policies are a critical component of an insurance and risk management program.
What Is Commercial Excess Liability Insurance?
An excess liability insurance policy provides coverage limits in excess of an underlying liability policy. Put another way, excess liability policies “drop-down” to replace primary coverage when limits on the primary policy have been exhausted. This type of coverage often matches the exact terms of the primary policy or policies. However, an excess liability insurance policy can also be more restrictive and include more exclusions than primary policies. It should be noted that excess liability insurance only offers additional limits to the primary insurance policy and will not protect a business if there is no primary policy already in place.
What Is Umbrella Insurance?
Umbrella insurance, like commercial excess liability insurance, provides coverage for claims exceeding the primary policy’s limits. However, this type of policy can offer broader coverage for losses outside of those outlined within the primary policy or policies.
Key Differences
While umbrella and excess liability insurance are both types of secondary insurance that function nearly the same, there are a few notable differences. The most significant difference between the two is that umbrella insurance can broaden coverage and apply to losses not covered by the primary coverages that are in place. In contrast, excess insurance only extends the limits of liability of the primary policy or policies.
Conclusion
Umbrella and commercial excess liability insurance policies add critical protection layers to primary insurance policies. These coverages can protect your business from catastrophic losses exceeding your liability policy’s coverage limits and reduce the chance that a lawsuit or other claim could bankrupt your business. When costs for insurance settlements and jury verdicts frequently reach millions of dollars, umbrella and excess liability policies are a critical component of an insurance and risk management program.
The Last Word
For more information about umbrella and excess liability insurance policies for your business, contact an InsureGood Advisor today.