Umbrella liability is a type of liability which provides additional limits over the underlying liability. The biggest advantage of an Umbrella policy is that it may provide additional coverages not otherwise included in the underlying liability policy. They also help broaden the business insurance liability so that the gaps in coverage are closed and eliminated. It offers first dollar liability coverage which is above any deductible or retained limit.
Excess Liability also provides additional limits over the underlying liability policies, but in a more restrictive manner. In fact, there may be more restrictions in the Excess Liability policy than the underlying liability policy has. It incorporates and follows all the definitions and limits of the underlying policies, but does not provide any additional coverages that the underlying policy may be lacking.