Excess Liability: What is it & When Do Your Clients Need it?

When getting your clients on board with any changes to their insurance policies, you may want to do a comprehensive exam of their current coverage and a risk assessment. Is there a potential that they may find themselves in trouble should they suffer a loss? Even with a policy intact, it may not afford the type of protection a high-value loss may require. Enter the excess liability policy. This additional coverage kicks in when the loss is more than what the primary policy covers. Brush up on the basics of this type of supplemental plan, and why you should convince your clients it could save their personal financial health.

Is Excess Liability Coverage the Same as an Umbrella Policy?

Perhaps your clients already subscribe to an umbrella policy, so getting them to buy into a third type may prove difficult. However,¬†remember that excess liability coverage is not the same as that afforded under an umbrella policy. Think of what the purpose of an umbrella policy is: it fills a gap. In case of a catastrophic event not covered under the primary policy, the umbrella steps in and provides protection. On the contrary, excess liability only triggers when the incident exceeds the primary policy’s limits. It goes above and beyond an already covered event.

What Is the Hierarchy When Multiple Coverage Types Exits?

After going through the differences in excess liability and umbrella policies, you may next want to explain the process that follows a claim. When an event occurs, the primary insurance policy will apply and all relevant provisions and coverages will kick in first. This first insurer, whether it is you or another company, becomes responsible for the initial coverage of a claim. Once the policy pays its full limits, the excess liability coverage activates. This policy does not contain different provisions or coverage. It serves as an additional source of funds to tap into when the primary policy becomes depleted by high payouts, such as settlements or judgments.

Does Your Client Need Three Policies?

Insurance policies deal with worst-case scenarios. In speaking to your clients about their current portfolio, you should determine how best to provide them with options for covering things such as:

  • Product liability lawsuits
  • Premises liability claims
  • Natural disasters and fire
  • Employee injury claims
  • Personal injury litigation

About AmSuisse

Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (855) 912-8697 to speak with one of our representatives.