Excess Liability Coverage
What Is Excess Liability Coverage?
Excess liability coverage is insurance that extends the dollar limit of your general liability policy.
Imagine you’re making a large purchase on a credit card, but what you’re buying costs more than your card’s limit. You need a backup credit card to pay for the rest.
Excess liability is like your backup credit card. It’s the extra amount you use to cover claims after your general liability limit is maxed out.
How Does Excess Liability Coverage Work With My Policy?
Excess liability insurance works by extending the limit of your general liability policy. It only applies to covered claims that cost more than your original policy can pay.
For example, a food vendor carries $2 million in general liability coverage, but wants to sell at a baseball stadium that requires $3 million in total coverage. Adding $1 million in excess liability allows them to meet that requirement.
What if that food vendor spills fryer grease and a fan slips, falls, and suffers a back injury? The vendor’s general liability policy pays first, up to its limit. If the total claim is higher than that amount, excess liability covers the remaining costs.
How Do I Add Excess Liability Insurance to My Policy?
Add excess liability coverage to your policy any time via your online Insurance Canopy dashboard by following these steps:
- Log in to your dashboard
- Go to “Policies”
- Click on “Change Policy Options”
- Choose the “Liability Limits” you need (this includes what’s on your current policy)
- Click “Purchase Selected Options”
If you need help, please contact us to speak to a licensed, non-commissioned customer service agent. We’re ready to help you get the right coverage for your growing business.
Umbrella vs Excess Liability: What’s the Difference?
Excess liability adds higher limits to a single policy for the same coverage. Umbrella insurance increases your limit across multiple policies (general liability, commercial auto, etc.) and may add extra coverage.
While an excess liability policy only pays out after you’ve hit your original liability limit, umbrella insurance can also kick in to cover a claim that’s not covered by your underlying policy. (Of course, that’s only if your umbrella insurance covers it.)
Here’s a breakdown of the differences between umbrella vs excess liability insurance coverage:
Swipe →
| Features | Excess Liability | Umbrella Insurance |
|---|---|---|
|
Increases the Limit? |
Yes |
Yes |
|
Adds New Coverage? |
No |
Sometimes |
|
Applies to Multiple Policies? |
No |
Yes |
|
Example |
An event organizer needs more liability coverage than their standard policy provides to book an event. Excess liability increases that limit without changing the underlying policy. |
A landscaping business owner carries multiple liability policies for their business, vehicles, and employees. Umbrella insurance extends the limit across several policies for wider protection. |
|
When to Choose |
Choose excess liability insurance when you need higher contract limits at a lower cost |
Choose umbrella insurance when you want higher limits and broader protection to fill gaps in your coverage |
Do Small Businesses Need Excess Liability Coverage?
Short answer: Sometimes. Small businesses don’t always need excess liability, and many will never need it. But for those that do, it’s the most affordable way to raise your protection when large risks or contracts demand it.
Common reasons small businesses need excess liability:
- A client, venue, retailer, or marketplace requires limits above your base policy (they might need your Certificate of Insurance to show $2–$5 million in total liability coverage)
- You have a higher risk exposure (selling products at wholesale, working events with lots of foot traffic, or using hired/non-owned vehicles)
- You’re signing enterprise-level contracts or leasing spaces where one bad claim, such as a fire, could threaten your cash flow or assets
Additional Resources
- General liability insurance (the most common type of coverage where excess liability insurance may be required)
- Learn more about small business insurance coverage types your business may need
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