What is Excess Insurance & Who Needs it?

excess liability

Whether you sell car insurance, travel insurance, or homeowner’s insurance, your clients probably ask you about their deductibles and maximum coverage limits. After all, they want to know how much they’ll have to pay when they file claims. If you have clients with histories of making lots of claims or high levels of risk, consider offering them excess insurance.

What Are Excess Liability Insurance Policies?

Excess liability insurance is a secondary form of coverage that provides assistance if your clients’ expenses exceed their normal insurance. Your clients choose how much excess they want to cover, and their premiums go up accordingly. This type of insurance is separate from their original policies. For example, if your client has excess homeowner’s insurance, he or she pays for two different homeowner’s insurance policies.

When you’re offering excess liability insurance, make sure that your clients know you’re not talking about umbrella insurance. While people often use these terms to refer to the same policies, umbrella insurance covers all of a client’s different plans. Excess liability insurance generally covers costs for one or two related plans. Also, umbrella insurance assists with problems that the original insurance policies do not cover, while excess liability insurance does not.

Is Excess Liability Insurance Necessary?

Excess liability insurance is not necessary for every client. It is also not legally mandated the way normal car insurance is. Talk with your clients and look at their claims history and savings accounts to determine if excess insurance is right for them.

What Are the Different Types? 

Lifestyle excess liability insurance includes coverage for plans related to your clients’ personal wellbeing. For example, if they have separate policies for their pets, expensive belongings, and houses, lifestyle insurance can cover excess charges across these plans. Single excess liability insurance, which is the more common kind, applies to just one plan. Because it’s easier to keep track of and targets specific concerns, your clients are more likely to find this variety helpful.

What Are Some Common Scenarios for This Insurance?

Many clients find excess liability insurance difficult to understand at first, so offer them a few different scenarios. For example, business owners are liable if customers get injured in their stores, whether they trip on cleaning equipment or slip on unmarked spills. Their general liability insurance kicks in to help with the customers’ medical bills, but sometimes customers need more money than a general liability policy covers. When this happens, excess insurance activates to cover the rest of the settlement.

Excess liability insurance can cover similar issues with commercial fleets, especially if a driver is liable for a major accident. It’s also useful if your clients’ small businesses get sued; usually, legal expenses far exceed their budgets.

About Cochrane and Company

For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (509) 462-1148.


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