With lawsuit judgments getting larger and larger for many predictable business mishaps, it’s worth taking a moment to review the changes at your company recently and to ask if your coverage is adequate to the current legal environment. General liability and even business-specific coverage like third-party liability for contractors have their limits, though, so it’s not always an option to simply buy more insurance. Nor is it always the best choice. Supplementing a policy that generally covers what you need for basic mishaps with one that provides excess liability coverage under narrow circumstances could save you a lot of money. In some cases, it might even let you lower your coverage limits for your general liability coverage by filling an important gap.
When Does Excess Liability Insurance Kick In?
The point of an excess liability policy is not to replace your general liability policy, but to protect against situations where a court judgment exceeds it. Since its coverage provisions are quite narrow and it doesn’t need to take care of general issues like paying for the medical expenses of people injured on-site outside of a settlement judgment, it can be written to be much more cost-effective for its coverage value than a general liability policy with the same upper limits. This helps you avoid overpaying for insurance without undercutting your protection, and it’s worth talking with an insurance professional about whether it’s a good fit for your business.