What is an excess layer in insurance

What are excess layers?

Excess layer (aka Excess of Loss) insurance is when one insurer provides insurance for the first part of a claim/loss and then another insurer provides insurance for the next part of the claim/loss. The insurance for the next part of the claim/loss is referred to as the Excess Layer.

What does layer mean in insurance?

Layer — a horizontal segment of the liability insured—for example, the second $100,000 of a $500,000 liability, is the first layer if the cedent retains $100,000 but a higher layer if it retains a lesser amount.

What is an excess insurance policy?

Excess insurance provides additional financial limits above those covered by the underlying policy. Unlike umbrella policies, excess insurance does not expand the terms, or scope, of the underlying policy, but rather, covers higher limits to safeguard against unforeseen, catastrophic claims and loss.

What's the difference between excess and umbrella?

Excess liability and umbrella liability are often confused as the same thing, but they're two different coverage types. Excess liability covers losses above the limits of your primary insurance policy. Umbrella liability offers higher liability limits and coverage where your underlying policy might not.