Excess insurance is insurance that covers the insured against certain risks and applies only to loss or damage in excess of a stated amount, or of a specified primary insurance policy or amount of self-insurance.

Although the terms excess liability insurance and umbrella insurance are sometimes used interchangeably, there is an important distinction. Excess liability insurance provides additional coverage for one of your primary liability insurance policies (general liability insurance, commercial general liability insurance) and kicks in with an additional amount of coverage under the same terms as the underlying, primary policy. Umbrella insurance provides additional coverage for several underlying liability policies and kicks in when proceeds from one of those policies reaches its limit.

In insurance industry jargon, both excess liability insurance policies and umbrella insurance policies are said to “sit on top of” the underlying liability insurance policy or policies.

In Hawaii, excess insurance is a type of coverage that provides additional protection beyond the limits of the insured's primary policy. It activates only when the underlying policy's limits have been exhausted. This type of insurance is particularly important in Hawaii where businesses and individuals may face significant risks due to the state's unique geographic and economic factors. Excess liability insurance specifically extends the coverage of a primary liability policy, such as general liability or commercial general liability, with the same terms and conditions, but with additional limits. Umbrella insurance, while similar, differs in that it can provide broader coverage and can extend to multiple underlying liability policies, such as auto, employers' liability, and watercraft policies. It not only adds higher limits but may also cover claims that the primary policy does not, subject to its own terms and exclusions. Both types of policies are designed to offer an additional layer of security in the event of major claims or lawsuits that exceed the limits of primary insurance policies. It's important for policyholders in Hawaii to understand the terms and coverage limits of their excess and umbrella insurance policies to ensure adequate protection against potential risks.