Excess liability insurance, more commonly known as umbrella insurance, is one of the most important types of insurance a company can purchase.

It protects companies from gaps or liability limit caps in existing policies as well as from financially draining lawsuits.

Excess liability protects your company from the types of claims that could potentially close your business.

It covers losses above and beyond a companies underlying policy limits contained in their commercial general liability, business auto, employer liability, workers’ compensation and professional liability.

Companies of all types and from many different industries benefit largely from excess liability.

Because it extends coverage dramatically at a relatively small additional cost, many choose to pay the additional premium.

For instance, assume a jury ordered a business to pay $5 million in damages for a liability claim.

The company’s general liability policy has a $2 million aggregate liability limit.

This would normally required the company to cover the additional $3 million out of pocket.

However, with a $3 million excess liability policy, the umbrella policy would cover the outstanding $3 million in damages, after the $2 million from the generally liability policy was exhausted.

Excess Liability is also beneficial because a correctly written policy can save a business money and cover more assets by using fewer individual policies.

There can be many common policy exclusions on Excess Liability policies so be sure to read through the endorsements and exclusions in the policy specimen.

And as always, be sure to have a knowledgeable and trustworthy broker guide you through the process.

We are available any time to answer your insurance or risk management questions. We will see you again soon!