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 Utah, excess insurance is designed to offer additional protection beyond the limits of the insured's primary policy or self-insurance. It becomes effective only after the underlying policy's limits have been exhausted. 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. On the other hand, umbrella insurance not only provides extra limits over several underlying liability policies but may also cover a broader range of risks, potentially including those not covered by the primary policies. Both types of insurance are crucial for individuals and businesses in Utah seeking to protect their assets from significant claims that exceed the limits of their primary insurance policies. It's important for policyholders to understand the terms and coverage of their excess and umbrella insurance policies to ensure adequate protection. State statutes and federal law regulate these insurance products to ensure they meet certain standards and operate fairly.