What type of coverage does excess liability insurance provide?

Excess liability insurance is specifically designed to provide additional coverage above the limits of an underlying policy, such as a general liability or auto liability insurance policy. When a claim exceeds the policy limits of the primary coverage, excess liability insurance kicks in to cover the remaining amount, thereby ensuring ongoing protection against large financial losses that could arise from major claims.

This type of insurance is crucial for businesses and individuals who seek to safeguard their assets against significant liabilities that may arise from lawsuits or claims that exceed their existing coverage limits. For instance, if a business is found liable for damages amounting to more than the coverage limit of its general liability insurance, the excess liability insurance would provide the additional financial protection necessary to cover the remaining costs.

This characteristic of excess liability insurance highlights its role in providing a higher layer of protection, making it a vital component of comprehensive risk management strategies.