- What is it?
Excess liability coverage is a type of secondary insurance. As such, it’s typically used to augment the protections of a primary, underlying policy’s liability coverage.
- Who’s it for?
When a single underlying policy needs to be supplemented, excess liability insurance is usually the most cost-effective way to get the additional protection
- What is offered?
Umbrella insurance is another type of secondary liability coverage, but it diverges from excess liability insurance in important ways
Excess Liability Insurance in California
What is excess liability coverage?
Primary insurance policies provide substantial amounts of coverage, but sometimes even their upper limits aren’t enough. Excess liability coverage provides a way for California businesses seeking more coverage than their primary policies have get that additional protection they want.
Excess liability coverage is a type of secondary insurance. As such, it’s typically used to augment the protections of a primary, underlying policy’s liability coverage.
Which California businesses should consider excess liability insurance?
Supplemental liability insurance is something that most California businesses should consider. Excess liability insurance may be the best way for many businesses to get that extra protection.
When a single underlying policy needs to be supplemented, excess liability insurance is usually the most cost-effective way to get the additional protection. If there are multiple underlying coverages to supplement, umbrella insurance may be the better choice.
In either case, however, having additional coverage can be especially important given how expensive liability lawsuits can be.
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How much does excess liability insurance cost?
One of the reasons businesses opt for excess liability policies is because these policies offer very affordable coverage. Limits and premiums can differ, but most policies provide extensive coverage (frequently in the millions) and have comparatively low monthly premiums.
Insurance companies are often able to provide excess liability at such low rates for a couple of reasons. First, it’s a secondary and not a primary insurance policy. Second, it usually supplements just one other liability policy.
What makes excess liability and commercial umbrella insurance different?
Umbrella insurance is another type of secondary liability coverage, but it diverges from excess liability insurance in important ways.
Excess liability policies usually adopt the terms and conditions of one underlying policy they supplement. This means that excess liability typically only increases premiums. It also normally doesn’t fill in coverage gaps or supplement multiple underlying policies, since the insurance adopts the terms of an underlying policy.
Commercial umbrella policies often come with their distinct terms and conditions, which can differ from the underlying policy. Since umbrella policies don’t strictly adhere to an underlying policy, they frequently do more than only increase limits. While they certainly do that, they also might fill in coverage gaps and/or supplement multiple policies.
Generally, umbrella policies offer more comprehensive coverage than excess liability policies. Correspondingly, umbrella policies tend to cost more too.
Can an excess liability policy be utilized to supplement an umbrella policy?
Some businesses use an excess liability policy to supplement an umbrella policy, which itself is likely supplementing one or more underlying policies. In these scenarios, the excess liability policy generally adopts the terms of the umbrella policy while further increasing the available limit(s). This can potentially result in quite high maximum limits for covered liability claims.
Businesses are always responsible for their own research and due diligence, but it’s particularly critical to check details when supplementing an umbrella policy with an excess liability policy. Both policies’ terms must allow for the structure, and provide robust protections.
Businesses that wish to protect themselves in this way can work with an insurance agent who specializes in excess liability and commercial umbrella insurance. A knowledgeable agent will be able to check policy options and specific policies in detail.
How can California businesses obtain excess liability coverage?
For help finding excess liability coverage that’ll protect your business well, contact the independent insurance agents at Truck Writer Insurance Services. We’re able to assist businesses with this and many other liability coverages, and will make sure your business has the coverages and limits it requires.