Excess liability insurance (also called business umbrella insurance) covers businesses from catastrophic issues that threaten their security. An excess liability insurance policy acts as an umbrella to your basic liability insurance. This type of coverage kicks in when a claim is made against you that exceeds the amount of your existing liability coverage. Umbrella liability insurance provides a safety net when your other business coverage has been exhausted.
Business umbrella insurance moves the risk to a carrier through the issuance of a policy to the insured. Excess or business umbrella insurance may be used to supplement primary insurance on an excess basis or provide coverage above a self-insured retention. Excess or umbrella insurance policies have many advantages like improving cash flow since they cost less than primary insurance, allowing the insured to manage smaller more frequent claims, and getting you direct contractual relationship with the excess insurer.
Excess liability insurance policies are subject to relatively less rate and form regulation than primary insurance.