Definition
Excess and umbrella liability insurance provides additional coverage beyond the limits of an insured’s primary policies. This type of insurance covers claims that exceed the bounds of the base policy’s amount, adding an extra layer of security for individuals or businesses.
Function
- Exceeds Primary Policy Limits: If the claims made exceed the limits of the primary insurance policy, excess and umbrella liability insurance will cover the additional costs.
- Covers Unknown Gaps: It also covers gaps in basic coverage or self-insured retentions that may not be explicitly known until a claim is made.
- Secondary Coverage: This insurance acts as a secondary layer of protection after the primary insurance limits have been exhausted.
Key Features
- Extended Coverage: It significantly expands coverage limits over and above the primary insurance.
- Wide Range of Protection: Offers coverage for a variety of potentially substantial and unpredictable liabilities.
- Risk Management Tool: Helps in managing risks potentially too large for usual insurance policies to handle.
Regulatory References and Guides
Understanding how various forms of liability insurance interplay and are regulated can enlighten policy choices. Information and guidance can often be found in:
- The Insurance Information Institute provides numerous guides and articles related to excess and umbrella liability insurance.
- EIOPA (European Insurance and Occupational Pensions Authority) offers key documents and context on insurance regulations impacting these policies via their portal.
- State or national Department of Insurance websites can offer specific laws and guidance on insurance coverages.
By integrating and understanding excess and umbrella liability policies, one can secure a robust safety net against extensive financial risks inherent to both life and business.
