When you are looking for insurance coverage, some carriers forget that the average consumer doesn’t know the difference in terms that are often used interchangeably. With insurance services, umbrella and excess seem to represent the same coverage, but there are some clear differences. Here is a brief comparison between umbrella insurance and excess insurance.
It is usually a commercial enterprise that takes advantage of an excess coverage policy. Even though a business may carry general liability or commercial property, there may be incidents when the payout for a claim exceeds the limits established by the primary policy. An excess policy is a secondary line of defense, extending the limit options to meet the additional financial needs. The team at David Sayles Insurance recommends carrying such a policy based on the seriousness of risk potential.
There can be situations where there is a gap in coverage due to exclusions. An umbrella coverage policy applies in those areas, as they are often underwritten to address the specific areas of restricted or limited coverage. This is the key area of difference. Umbrella extends the bounds of coverage, while the excess policy redefines the financial limitations.
Evaluating your areas of risk will help you know what type of coverage you need. Your insurance broker can also help with analysis and advisement.