What does an excess liability coverage typically provide?

Excess liability coverage is designed to provide an extra layer of protection that goes beyond the limits set by standard liability policies. When policyholders encounter a situation where their standard liability coverage is insufficient to cover claims, excess liability coverage steps in to cover the additional amounts. This often becomes essential in severe incidents, such as major accidents that can lead to significant financial liabilities that exceed the primary insurance limits.

For example, if an individual has a standard liability policy with a $250,000 limit and faces a lawsuit resulting in a $1 million claim, excess liability coverage would cover the difference, ensuring the individual is not left with a financial burden that exceeds their policy limits. This type of coverage is especially valuable for individuals and businesses seeking to protect their assets and financial wellbeing against potentially catastrophic claims.