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 Wisconsin, 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 primary insurance policy's limits have been reached or exceeded. 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 several underlying liability policies, potentially including auto liability, employer's liability, and others. It is designed to not only add limits but also to broaden the coverage and fill in gaps that the primary policies might not cover. Both types of insurance are crucial for individuals and businesses seeking to protect themselves from potentially catastrophic financial losses that exceed their primary policy limits. Wisconsin policyholders should consult with an attorney or insurance agent to understand the specific terms and conditions of their excess or umbrella insurance policies and ensure they have adequate coverage for their needs.