A policy issued to provide limits in excess of an underlying liability policy. The underlying liability policy can be, and often is, an umbrella liability policy. An excess liability policy is no broader than the underlying liability policy; its sole purpose is to provide additional limits of insurance.

For example, you could have an Excess Liability policy that extends the coverage of your General Liability Insurance. That way, if you are found liable for $1.5 million in damages and your GL only covers $1 million, you can make a claim on the Excess Liability policy to cover the remaining $500,000. Here’s an important catch, though: Excess Liability can only be applied to one underlying policy. So if you have Excess Liability for your GL Insurance, you can’t use that coverage toward any other policy. Say, for example, an employee sues your client over a workplace accident. They would need Excess Liability coverage written for an Employer’s Liability policy (part of their Workers’ Comp Insurance) if the damages exceed their limits.