The Wallace Insurance Agency

Excess Liability Coverage 

Understanding Excess Liability Coverage: Protecting Your Business Beyond Limits.

Excess Liability Coverage is an insurance policy that provides additional protection beyond the limits of a primary liability policy. It is designed to safeguard individuals and businesses from potential financial losses that may surpass the coverage provided by their underlying policies. In simple terms, if an unfortunate event occurs and a claim is made against you or your business, excess liability coverage kicks in when the liability limit of your primary insurance policy has been exhausted. This additional coverage becomes crucial in situations where the financial impact of a claim exceeds the limits of the primary policy. For instance, say you have an auto insurance policy with a liability limit of $500,000, but you are involved in a severe accident resulting in a claim for $1 million. With excess liability coverage, it would cover the remaining $500,000 that exceeds your auto insurance’s limit. Excess liability coverage is typically used by high-net-worth individuals and businesses that face increased risks or have substantial assets to protect. It provides peace of mind by filling the potential gaps in coverage and shields policyholders from the financial hardships that may arise from a catastrophic event. It is important to note that excess liability coverage does not replace the underlying primary liability policies but rather supplements them, offering an added layer of protection, which can prove to be invaluable in times of unexpected liability.

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