What is 'excess liability insurance'?

Excess liability insurance is a type of insurance that provides coverage above the limits of an underlying policy, such as a general liability or auto insurance policy. This means that if a claim exceeds the limits of the primary insurance policy, the excess liability insurance will kick in to cover the remaining amount. This type of insurance is particularly important for individuals or businesses that may face large claims, offering an additional layer of protection against significant financial losses.

In contrast, insurance that covers only specific risks refers to more specialized policies that do not provide broader coverage. Insurance protecting against professional errors typically falls under professional liability insurance, which addresses mistakes made in a professional capacity rather than excess claims. Coverage for personal injury claims only focuses on specific types of legal claims, which limits the protective scope that excess liability insurance offers. The key feature of excess liability insurance is its ability to provide a safety net beyond standard policy limits, making it essential for comprehensive risk management.