What’s the Difference Between Umbrella and Excess Liability Insurance Policies?


If you have any type of insurance policy, you probably have heard of something called insurance liability. You are able to increase the liability limits of your auto, home or any other insurance policy, but you can only increase as high as your insurance company will allow. If you are still not comfortable with your liability amounts, you have two other options. Umbrella and excess liability policies can help further protect your family’s finances and way of life, especially if a claim is made against you.

What Are Umbrella Policies?

Umbrella liability is a kind of liability that provides additional limits over the underlying liability. Umbrella policy’s intention is to extend limits and coverage on some or all of the insurance policies that you already have, such as homeowners or auto insurance. This type of liability helps broaden your existing insurance liability so that gaps in your coverage are closed or deleted. Some examples of additional coverage that an umbrella policy provides are: expanding your auto coverage territory to more locations over the world, personal injury coverage for specific claims, and liability for certain claims if you were a leader or director in a certain business role.

What About Excess Liability Policies?

Excess liability insurance can also provide extra limits over the underlying liability, but this kind of policy is much more restrictive. This liability policy gives overlays over the already existing insurance policy by increasing the per person or per occurrence limits. Excess liability includes all the limits and definitions that already exist in your underlying policies, and it does not have any effect on any other insurance policy you or your business might have. Excess liability can be disadvantageous because it so restrictive and it may have more restrictions than your current underlying coverage.

Peters, Habib, McKenna, Juhl-Rhodes & Cardoza, LLP are skilled attorneys at insurance law and will help you solve your complicated insurance law issues. Contact us today.