Excess Liability Insurance Can Help Your Business Out of a Tight Spot

Excess Liability Insurance Can Help Your Business Out of a Tight SpotExcess liability insurance provides insurance limits that go above and beyond a business’s primary liability policies. When a claim is reported to the insurance company, the first policy to respond is the underlying primary; if the claim exhausts the limits in the primary policy, the excess liability policy picks up where the primary left off.

Excess liability insurance provides protection against financial disaster for personal injury, contractual, vehicle (including aircraft & watercraft), and liquor law liability. A pure excess liability insurance policy provides additional limits above the primary policy. If the primary policy provides coverage for a particular claim, so does the excess liability policy.

It’s common to confuse excess liability insurance with commercial umbrella insurance. While these two policies serve a somewhat similar function, they are in fact not interchangeable. Let’s take a closer look at the details of Excess Liability Insurance.

Deductible vs. Self-Insured Retention

Claims and lawsuits unfortunately are simply just inherent in the world of doing business and an extra layer of liability protection is needed more and more. An excess liability insurance policy not only pays the amount a business is legally liable to pay as a result of the claim, but the policy also pays for the legal costs incurred in defending the claim. With a strict excess liability policy, the deductible is usually equal to the liability limits on the primary policy.

On the contrary, due to the fact that an umbrella policy provides coverage above and beyond what the underlying policies provide, the umbrella has a self-insured retention. This means the insured must pay out of pocket the defense and claim costs until the self-insured retention is reached. A typical self-insured retention is $10,000. Once the self-insured retention deductible is satisfied, the insurance company is then able to take over and will pick up the rest of the costs until the policy limits are reached. An excess liability insurance policy is your ticket to establishing well-rounded protection for your business.

Excess Liability Cost

The cost for purchasing excess liability is quite minimal in comparison to the amount of protection it provides. According to the Insurance Information Institute, the cost of $1 million of personal protection is around $150, as of publication. The second $1 million will cost around $75, with $50 in costs for every $1 million thereafter. The cost to purchase excess liability insurance for a small business may be more costly than purchasing a personal policy, depending on the type of business and specific risk exposure the business endures, but even at $300 for $1 million in coverage, it is well worth the investment and peace of mind.


About Byrnes Agency

At Byrnes Agency, we offer auto insurance solutions that can be tailored to meet your specific needs. Whether you have an old classic car or a brand-new model, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

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Phone: (860) 774-8549

394 Lake Rd

Dayville, CT 06241

United States


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