Risky Business: Industries That Benefit From Excess Liability Insurance Coverage
Excess liability policies provide businesses in high-risk industries with additional coverage beyond the limits of their primary general liability policies. Having this extra buffer is beneficial for companies that face substantial liability exposures, like those in construction, healthcare, and technology. Whether facing risks related to personal injuries, property damage, advertising offenses, or other hazards, carrying excess liability insurance is necessary for firms across sectors like manufacturing, insurance, and waste management.
What Is Excess Liability Insurance?
Excess liability is business insurance coverage that kicks in once a claim reaches the limits of the primary liability policy. Unlike umbrella insurance, which provides first-dollar coverage above underlying policies, excess liability applies on top of the total per occurrence and aggregate limits of general liability and other liability contracts first.
For example, if a company has $2 million in coverage through underlying policies and purchases a $5 million excess liability policy, the excess would respond to cover claims between $2 million and $7 million.
One of the main benefits of purchasing higher excess liability limits is closing gaps from the primary policy limits. This coverage allows the company to meet the high costs of settlements or judgments without financial disaster.
High-Risk Industries Requiring Excess Liability Coverage
Excess liability coverage helps businesses in many industries.
Construction
The construction industry carries a high risk of accidents on worksites that can lead to costly injury claims or multimillion-dollar lawsuits. The prevalence of dangerous equipment, flammable materials, and multi-employer job sites can exhaust general liability limits quickly. Excess liability insurance picks up where underlying limits cap out for massive claims such as a crane collapse or an explosion.
Healthcare
In the healthcare sector, risks include allegations of negligent care, misdiagnoses, surgical errors, or other issues jeopardizing patient wellbeing. Hospitals and large physician practice groups depend on excess liability to cover defense expenses after exhausting primary policies.
Manufacturing
For manufacturers, product liability poses major financial concerns should a defective product injure many consumers, such as an appliance with a faulty wire causing fires.
Hospitality
In the hospitality and entertainment realms, stadiums, amusement parks, and event centers face risks around spectator safety and security. By carrying excess liability limits, these venues ensure adequate protection if an operational failure leads to a catastrophic mass casualty event.
Benefits of Excess Liability Coverage
Excess liability coverage ensures financial protection for vulnerable businesses. It fills gaps left by primary policies, extending coverage limits through extra layers of insurance. This coverage guards against catastrophic losses due to a liability lawsuit or seven-figure settlement.
When a high-profile incident occurs, such as a widely reported product recall, the resulting legal claims can overwhelm standard liability maximums. Excess coverage handles these massive costs, keeping companies solvent instead of facing insolvency.
It also picks up ballooning defense bills that come with lengthy legal disputes. Ongoing defense and investigation expenditures compound primary policy limits, but excess liability insurance continues meeting these costs.
Byrnes Agency provides tailored excess solutions for firms in high-risk sectors. Contact us today to see how we can help.
About Byrnes Agency
At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, 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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