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 North Dakota, excess insurance is a type of coverage that provides additional protection beyond the limits of the insured's primary policy. It is designed to cover claims that exceed the amount of the primary insurance coverage. Excess liability insurance specifically adds extra coverage to one primary liability policy, such as general liability or commercial general liability, and follows the terms of that underlying policy. Umbrella insurance, while similar, differs in that it extends coverage over multiple underlying liability policies, such as auto, general liability, and employers' liability, and can provide broader coverage in some cases. Both types of insurance are considered secondary coverage and are activated when the primary insurance is exhausted. The regulation of excess and umbrella insurance in North Dakota is governed by state insurance laws and overseen by the North Dakota Insurance Department, which ensures that these insurance products comply with state statutes and regulations.