In 2023, a freight train carrying hazardous materials derailed in Ohio, leading to a widespread chemical spill. Numerous lawsuits were filed against Norfolk Southern Railway Co. including a class-action suit.
The losses were expected to exceed $100 million, exceeding the company’s self-insured retention.
In catastrophic scenarios like this one, losses can soar above your policy limits. Excess liability insurance provides extra coverage when an unexpected event exceeds your primary policy’s limits. Who needs excess liability and what does it cover?
In this guide, we’ll explore:
- What is excess liability coverage?
- What does excess liability cover?
- Who needs an excess liability policy?
- How much does excess liability cost?
- How safety programs impact your excess liability insurance
- How to get excess liability coverage
- The excess liability claim process: What to expect
- Get the excess liability coverage you need from a partner you trust
What is excess liability coverage?
An excess liability insurance policy provides additional protection beyond the limits of your primary liability insurance policies. It offers higher coverage limits to protect your business in the event of a catastrophic loss that exceeds the limits of your other policies.
What does excess liability cover?
Excess liability usually covers the same risks as your primary liability policies. Typically, an excess liability policy only applies to one other liability policy. Most businesses with excess liability have it as a supplement to their general liability policy.
In this case, your excess liability policy would cover legal expenses, medical expenses, settlements, and judgments for the same types of damage as your GL policy:
- Damage to someone’s property
- Bodily injury
- Personal injury
- Advertising injury
What is not covered by excess liability?
Because your excess liability policy is tied to another policy (typically general liability), it shares the same coverage exclusions. It typically won’t cover:
- Intentional and criminal acts
- Employee injuries and illnesses covered by workers’ comp
- Professional mistakes covered by E&O insurance
- Pollution liabilities
What is and isn’t covered can vary, so it’s important to be familiar with your specific policy details. At POWERS, we go through a thorough assessment with all clients to ensure the policies they buy fit the risk they face.
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Excess liability vs. umbrella coverage
Excess liability and umbrella coverage are often used interchangeably, but there is a difference. Excess insurance increases the limits of your primary insurance policy for an extra layer of protection. An umbrella policy not only increases the limits but may also offer broader coverage. It can cover certain risks excluded from the underlying policies.
Who needs an excess liability policy?
Many types of businesses can benefit from excess liability coverage. We recommend it, particularly for companies with high-risk operations, substantial assets, or significant exposure to lawsuits. This could include:
- Professional services
- Businesses serving the public
How much does excess liability cost?
Insurance carriers calculate your excess liability premium using several factors, such as:
- Business size
- Policy limits and deductibles
- Claims history
- Risk management practices
Because insurance rates can vary, it’s important to work with a risk manager to find the best solution. Businesses with complex risk profiles will find the most value from partnering with an independent insurance agent that will help them proactively manage risk for long-term success.
How safety programs impact your excess liability insurance
A strong workplace safety program can reduce your risk of incidents and claims – and therefore, lower your insurance premiums. Working with a safety education expert to develop consistent policies and procedures has a variety of other benefits, too, like:
- Reducing employee and customer injuries
- Reducing property damage from incidents
- Increasing employee retention
- Improving productivity and efficiency
- Boosting your company’s goodwill and reputation
How to get excess liability coverage
An experienced agent should recommend insurance policies for you based on your business’s unique exposures and risk profile. If your agent hasn’t recommended an excess policy but you think it could be a good fit, ask about it.
Your agent will find the best options based on your risk assessment and present them to you. At POWERS, we cover the following questions when presenting clients with coverage options:
- Does the pricing match the client’s expectations?
- Does the policy have the appropriate limits, deductibles, and coverage enhancement endorsements?
- What are the carrier’s financial stability, reputation, and claims process like?
- What added value can the carrier offer the client – e.g. customized coverage to fill gaps and claims coordination between primary and excess carriers?
At POWERS, we work with some of the best business insurance carriers in the U.S. There’s no need to spend hours researching providers – we’ll make recommendations tailored to your business.
The excess liability claim process: What to expect
If you need to file an excess liability claim, don’t panic. Thousands of claims are filed every day.
The claim process is different for every carrier and agency, so we recommend learning your insurance agent’s process before you need to file a claim. That way, you’re prepared when the time comes.
Here’s the claim process for POWERS clients:
- Contact your POWERS account manager or claims handler before you call the insurance company.
- A POWERS expert will provide a claim consultation to help you evaluate the severity of the claim, your deductible level, contractor referrals, and what to expect going forward.
- With your approval, your account manager will submit the claim to the carrier on your behalf. In some cases, you might choose not to file a claim.
- We’ll pass along your claim number and your adjuster’s contact info.
- You’ll work directly with your adjuster to provide relevant evidence, like police reports, medical records, and photographs of the damage.
- If your claim is covered, the carrier will offer a settlement amount to the claimant or provide a defense if a lawsuit is filed against you.
- The claim will be resolved through a settlement agreement or a court decision.
During this process, your POWERS claims consultant will be with you every step of the way.
Get the excess liability coverage you need from a partner you trust
Many businesses benefit from excess liability, but how can you make sure you get the right coverage and the most value from your policy? Who will guide you through the claims process when an incident happens?
At POWERS, we spent more than 30 years developing what we call “the POWERS Process.” We use this five-step framework to get a deep understanding of your business and make recommendations that not only give you the right insurance coverage but also help you make smart decisions to grow your business.
We know from decades of experience that a one-size-fits-all approach to risk management simply doesn’t work. We’ll take you through a series of discussion points to drill down and uncover exposures you’ve never considered. Then, we’ll build a plan to safeguard your business and look toward the future.
|Insurance as a stand-alone product
|Insurance integrated into your customized risk management plan
|Multiple, run-of-the-mill applications to assess your risk
|Customized, proprietary assessment for a deep understanding of your risk
|Focused on up-front cost savings
|Focused on long-term cost control
|Salespeople who write your policy and ghost you until renewal
|Partners who help you make smart, growth-focused business decisions
|Say they care about your business’s success
|Show you we care by setting your risk management plan in motion