What is excess liability insurance?

An insurance policy that exceeds the provision of additional financial protection in case you are required to pay a greater amount of money than your standard liability policy. It is similar to a policy though, but with much narrower focus.

What is excess liability insurance?

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Excess liability insurance is a secondary policy serving as a backstop for your primary insurance. Suppose you have the landlord's insurance policy to provide liability insurance for 750,000 dollars. Someone slide and fall into your property, Sue you and win a prize worth 1 million dollars from a court. Your insurance policy will not include more than 750,000 dollars. $250.000, the so-called excess, is your responsibility. If you have liability insurance exceeding at least $250,000, the insurance company will step in and pay the rest.

Scope of liability

Excessive liability insurance does not extend the coverage of your primary or "basic" insurance policies. That means it will only pay under the same conditions as the main insurance. For example, suppose you have the pool and policy of your own landlord excluding liability derived from the pool. If someone is injured in the pool, the main policy will not help you, and the policy of liability exceeds will not.

Excess stack Policy

Depending on the needs of insurance, a policyholder may essentially stack the policy of liability exceeded to ensure adequate coverage. For example, a small business may have a legal liability policy of $1 million, with the policy exceeding $5 million and the policy exceeds $2 million dollars "two layers." The main policy paid for a million dollars first, then the policy exceeded the first policy. The second class surplus policy did not pay anything until the first two had taken into a total of six million dollars.

Superior to Umbrella

Although excess policies are sometimes referred to as the umbrella policy, there is a major difference between them. A typical parachute policy provides coverage that exceeds the main policies and also includes the "gaps" in the insurance protection. The umbrella policy can step in to provide the primary insurance when no other insurance is available.

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