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Difference between Umbrella and Excess Liability

Difference between Umbrella and Excess Liability

Are you familiar with the difference between umbrella and excess liability insurance? If not, you’re not alone. A lot of people don’t know the difference, which is why we’re here to break it down for you. Let’s start with umbrella insurance. Umbrella insurance is a type of liability coverage that kicks in when your regular liability policies reach their limits. For example, if you are sued for $500,000 and have only $250,000 in liability coverage, your umbrella policy would cover the additional $250,000. Excess liability insurance, on the other hand, is an extra layer of protection that goes above and beyond your standard liability coverage.

What is Umbrella Liability?

Umbrella liability is extra protection from liability claims and lawsuits. It provides coverage above the limits of your homeowners, auto, or watercraft insurance policies and can help protect your assets and future earnings. Umbrella liability can also provide coverage for certain claims that may be excluded by your other insurance policies, such as slander, libel, and defamation of character. Umbrella liability coverage is typically very affordable and can give you peace of mind in knowing that you’re well protected.

What is Excess Liability?

Excess liability is insurance that provides protection against claims in excess of the coverage limit of the primary insurance policy. It is also known as umbrella liability insurance.

  • Excess liability policies are designed to fill the gap between the limits of the underlying liability policy and the amount of the claim. The coverage is usually written on a “claims-made” basis, which means that it covers only those claims that are made during the policy period.
  • Excess liability insurance is often used to protect against catastrophic losses, such as those that might occur in a major lawsuit. It can also be used to provide extra protection for high-risk activities, such as running a business or owning a home.
  • Excess liability insurance is typically sold in $1 million increments, and policies can be custom-tailored to meet the specific needs of the insured.

Difference between Umbrella and Excess Liability

  • Umbrella and Excess Liability insurance are both forms of liability coverage. Umbrella insurance is a type of personal liability insurance that provides coverage above and beyond the limits of your homeowner’s or auto insurance policy.
  • Excess liability insurance is a type of business liability insurance that provides coverage above and beyond the limits of your general liability policy. Umbrella and Excess Liability insurance both provide protection against lawsuits for bodily injury or property damage caused by you or your employees.
  • However, Umbrella insurance also provides protection against certain personal liabilities such as defamation, false arrest, and invasion of privacy. Excess Liability insurance does not provide this same level of protection. Umbrella insurance is typically more expensive than Excess Liability insurance because it provides more comprehensive coverage.


Umbrella insurance and excess liability insurance are two different types of policies with different purposes. An umbrella policy is designed to provide extra coverage above and beyond the limits of your other policies, while excess liability insurance is meant to supplement your existing liability coverage. Understanding the difference between these two types of policies can help you make a more informed decision about which one is right for you.

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