In an excess liability coverage form, how does its coverage typically compare to underlying insurance?

An excess liability coverage form is designed to provide an additional layer of liability protection beyond what is offered by the underlying insurance policies, such as general liability or auto liability. The coverage from an excess liability policy follows the terms and conditions of the underlying insurance. This means that it adheres to the same coverage limits, definitions, exclusions, and conditions as the underlying policies, simply kicking in when those limits are exhausted.

By providing higher limits of coverage, the excess liability policy ensures that once the limits of the underlying policies are reached—through claims, settlements, or legal judgments—the excess liability coverage becomes available to cover additional amounts. This structure allows businesses to manage their overall risk effectively while still maintaining compliance with the terms of the primary policies.

Therefore, the correct characterization of excess liability coverage is that it follows the underlying coverage but provides higher limits, which is a fundamental aspect of how such policies are structured in the risk management landscape.