Excess Insurance Law and Legal Definition

Excess insurance is used to supplement primary insurance on an excess basis or provide coverage above a self insured retention. It is a secondary insurance policy that covers a loss in excess of that covered under a primary policy. For example, the primary coverage is $500,000 and the excess insurance is $5 million. After the losses exceed $500,000, the excess insurance will pay for the losses up to a total of $5 million. It is a type of insurance which applies to such portion of a loss or damage that exceeds a specified amount.