What Is Excess Liability Coverage?
Excess liability insurance increases the limits of one underlying liability insurance policy.
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Updated · 3 min read
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Senior Writer & Content Strategist 
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Head of Content, Small Business 
Excess liability insurance increases the limits of an existing insurance policy, usually a commercial general liability insurance policy.
Excess liability insurance does not expand your current coverage. It simply offers a higher dollar limit in case a claim exceeds your current one. Think of it as insurance for your insurance.
You might need excess liability insurance to satisfy a landlord or client's contractual requirement if your general liability insurance limit isn't high enough.
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What does excess liability insurance cover?
Since commercial excess liability insurance sits on top of an existing policy, it covers the same things that the primary insurance policy does.
Excess liability can supplement:
- General liability insurance: Third-party claims of bodily injury, property damage or personal and advertising injury.
- Commercial auto insurance: Bodily injury or property damage claims (and associated legal fees) that occur from driving a company vehicle or driving a personal vehicle for business purposes.
- Employer’s liability insurance: Current or former employee claims against your business, like harassment or a hostile work environment.
What doesn't excess liability insurance cover?
Excess liability insurance does not provide additional coverage. Anything that isn't covered by your primary insurance policy will not be covered by an excess liability policy.
This coverage can also only apply to one policy. If you add excess liability to your general liability insurance policy, it can only increase your limit on that specific policy. A traffic accident claim that exceeds your commercial auto limits would not be covered.
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Excess liability coverage example
Let's say you have an underlying general liability policy with a $1 million limit. An excess liability policy would provide a greater limit on this original policy. Let's say it increases your limit to $2 million.
Then, your business fights a personal injury claim and has to pay a settlement of $1.5 million. Your general liability insurance would cover the first $1 million, and your excess liability coverage would kick in to cover the additional $500,000.
Umbrella vs. excess liability insurance
Umbrella insurance also provides coverage beyond your existing policy limits. But unlike excess liability, business umbrella insurance can:
- Sit on top of multiple existing liability policies.
- Cover claims not included in those existing liability policies.
Umbrella insurance is more more flexible than excess liability insurance. But you might want excess liability coverage to save on out-of-pocket costs.
Umbrella policies usually require "self-insured retention," which acts as a large deductible. For instance, if you have an SIR on your umbrella policy of $10,000 and you file a claim for $100,000, you would pay $10,000 out-of-pocket and the insurer would cover the remaining $90,000. Excess liability insurance deductibles equal the liability limits on the primary policy, which means you don’t have to pay anything out of pocket to tap your excess liability coverage.
How much does excess liability insurance cost?
According to insurance agency Liberty Insurance, a $1 million excess liability policy generally costs around $480 per $1 million in coverage. But this can vary widely depending on:
- The excess liability policy limit.
- The limit of your underlying policy.
- Your industry.
- Any past claims.
- Your location.
Does your business need excess liability coverage?
Not every small business needs excess liability insurance. But if a landlord or client requires you to have a certain amount of coverage, or if you operate in a particularly risky industry, it's an option.
While deciding, consider:
- Should you get umbrella insurance instead? Umbrella insurance might be a better choice if you have several different types of liability insurance and the risk levels feel relatively similar. You'll get coverage above your limits with just one policy instead of several.
- Should you just increase your existing policy's limit? Get a quote to see how much that might cost. It's possible excess liability coverage is cheaper.
Talk to an insurance agent or broker to compare these options based on your business's specific risks.
How to get excess liability coverage
Start by contacting your existing insurance provider. If they offer excess liability coverage, it may be easier and more affordable to stick with that company instead of shopping around.
However, if your provider doesn't sell excess liability or you want to compare rates, consider the following companies. All offer excess liability insurance with limits of up to $25 million:
You'll probably need to work with an insurance agent to get quotes and buy coverage. If you don't already have an insurance agent, you can use these companies' websites to find an independent agent who sells their policies.
