What does EXCESS Commercial Insurance (ACORD 131) mean?



Excess Liability insurance is defined as a type of coverage policy that provides limits that exceed the underlying liability policy. It does not concern the broader range incidents covered by the primary insurance that means it does not expand the stated coverage but provides higher limits on top of the original policy. The primary goal of Excess Liability insurance is to close the coverage gaps and to offer an extra layer of reassurance in case the underlying insurance is exhausted of all possible resources.

How does EXCESS Commercial Insurance Policy work?

When someone reports a claim in an insurance company, the first policy that covers all financial losses and damages is the underlying, or primary, policy. But if the claim crosses the limits of the primary policy, that is where Excess Liability policy kicks in. It picks up the remaining costs that are not covered by the primary insurance. Excess Liability insurance serves as the insurance of the insurance. It makes sure that everything is covered, even if the primary coverage has reached its declared limits.

For example, one of the customers accidentally slips on the floor while visiting the small business, resulting in a spinal cord injury. He files a claim against you, and the court decides that you are responsible for the incident. The injured customer wants a $1,500,000 settlement, but the General Liability insurance has policy limits of up to $1,000,000 per occurrence. If you have Excess Liability coverage insurance of $1,000,000 or more, you don’t need to worry about the remaining $500,000. Without it, you would have to pay the difference out of pocket.

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