What is the definition of "excess insurance"?

Excess insurance is defined as coverage that provides additional protection beyond the limits of a primary policy. It is designed to kick in after the limits of the primary coverage have been exhausted. This type of insurance is particularly important for individuals or businesses with significant assets or liability exposure, as it ensures that additional costs will be covered in the event of a large claim.

The essence of excess insurance lies in its ability to enhance the overall protection that a standard primary policy offers, effectively acting as a financial buffer against substantial losses. This can be especially crucial in scenarios where damages exceed the limits of the initial coverage, allowing policyholders to manage their risk more effectively and safeguarding their assets from unforeseen liabilities.

Other definitions, such as those pertaining to additional liability coverage for vehicles, coverage specific to natural disasters, or simply covering the limits of a primary policy, do not capture the full scope of what excess insurance entails and its critical role in comprehensive risk management.