As a business owner, you must take every precaution possible to protect your business. The reality is that you never know what might happen on any given day. Ensuring you have the right policy and the right level of coverage can protect your business from the unknown.
Among the many different types of policies that you can have to protect your business is excess liability insurance. An independent insurance agent can help you understand the many types of policies and guide you in choosing the policy to provide you with the most protection.
Save on Excess Liability Insurance
Call (866) 703-0853
Understanding Excess Liability Insurance
Excess liability insurance gives you extra protection beyond your first liability insurance policy. This policy will provide you with coverage for claims once the maximum for your initial insurance policy has been reached.
Why Do You Need Excess Liability Insurance?
Most businesses carry liability policies. Many such types of policies, including commercial auto insurance, commercial general liability insurance, and employers’ liability coverage. If your business is held liable for damage, such policies will provide you with financial protection.
It should be kept in mind that such policies do have a limit that will place a cap on the amount the insurance company will pay within a single claim or in a single year. While the maximum amount of coverage is typically enough to cover most claims, there is always the possibility that multiple claims or even a significant claim could exceed the policy’s limit. If that should happen, your business would then be liable for the remaining amount. While a large claim is not common, all it takes is one to drain your business.
Excess liability insurance provides supplemental coverage that can provide the additional protection you need if your first policy’s limits are exceeded. Businesses that operate in high-risk industries or own valuable assets will find that such additional protection can provide a significant amount of peace of mind.
What Is Covered by Excess Liability Insurance?
Excess liability insurance covers many of the same types of claims covered by an initial liability policy. This is true regardless of whether the initial policy is a commercial auto liability insurance policy, CGL insurance, or employers’ liability insurance. Excess liability insurance can also protect you in the event your business is sued. In such cases, the additional liability insurance policy would take over from your initial insurer to cover your legal defense once the limits of your initial policy have been exceeded.
Working with an independent insurance agent can help you learn more about excess liability insurance coverage levels.
Who Can Benefit from Excess Liability Insurance?
Many business owners sometimes opt to purchase this type of coverage when they are concerned that their initial coverage levels may not be sufficient. It’s not uncommon for businesses to be unable to acquire limits high enough from their primary carrier. Business owners in the following situations might find excess liability insurance to be beneficial:
- Own valuable assets that need to be protected in the event of a lawsuit
- Work in a litigious industry or industry is considered high risk.
- Work in an industry with a high risk of employees becoming injured
- Own a business that serves the public, which increases the risk of a claim
- Own commercial vehicles
- Have client contracts that require greater levels of liability coverage
Save on Excess Liability Insurance
Call (866) 703-0853
What Are Excess Liability Insurance and Commercial Umbrella Insurance Different?
Excess liability insurance can be easily confused with commercial umbrella insurance. This is because both types of insurance increase the limits of a company’s liability insurance. There are significant differences that should be understood, however.
First, excess liability insurance will only increase the primary policy’s financial limits. The same dangers that the initial policy covers are covered by excess liability insurance. Generally speaking, anything excluded from the primary policy would also be considered an exclusion from the additional liability insurance policy.
By comparison, a commercial umbrella insurance policy can expand its coverage and increase the initial policy’s limits. Furthermore, an umbrella insurance policy may provide coverage for claims that might not be covered by a primary policy.
If you aren’t sure whether you need an excess liability insurance policy, an independent insurance agent can help you to understand the differences between the policies and decide whether this type of policy is the right choice for your business needs.
What Are the Exclusions of an Excess Liability Insurance Policy?
Excess liability insurance generally excludes the same perils as the initial policy. Even so, some policies might also contain additional exclusions. Among the more common exclusions of an excess liability insurance policy include:
- Pollutants. Excess liability insurance policies will typically not cover bodily injury, physical damage, or other expenses associated with contaminants.
- Medical payments. Even if the initial insurance provides medical payment coverage, excess liability insurance usually will not.
- Auto coverage. In most cases, no-fault coverage, first-party physical damage coverage, underinsured or uninsured motorist coverage, and medical payments coverage are excluded.
What Is the Cost for Excess Liability Insurance?
Given the additional coverage and peace of mind provided by excess liability insurance, the cost is relatively minimal. Factors affecting this type of policy’s price include the industry in which you work, your business’s level of risk, and the amount of coverage you require. Working with a local independent insurance agent can help you determine whether this is the right type of additional coverage for your needs and to find a policy that will meet your needs and budget.
Choosing the Right Excess Liability Insurance Coverage
Excess liability insurance can offer tremendous peace of mind in the form of additional protection above and beyond your primary liability insurance policies. The key to ensuring you choose the right policy is understanding your coverage needs and the different types of policies available. A local insurance agent specializing in excess liability insurance can help you to ensure your needs are met.