What is excess layer insurance, and why is it important?
Excess layer insurance is an add-on or ‘top-up insurance’ policy that extends your existing cover. For example, if a construction business has public liability insurance of up to £5 million and a customer requires a £10 million upper limit (subject to terms) because of the size or high-risk nature of the project, a £5 million excess layer liability insurance policy effectively ‘tops up’ the amount to the required £10 million.
Excess layer insurance matters because many contracts and high-risk industries now require contractors to have higher liability limits than standard policies provide.
What does excess layer insurance cover?
Liability policies are commonly available with limits such as £1 million, £2 million or £5 million, although the appropriate limit varies by business and risk. In certain trades, the risks you are exposed to may exceed the £5 million limit provided by a standard liability policy. Builders of large commercial properties and tradespeople can often require higher levels of liability while working for local authorities.
Excess layer insurance can be arranged above certain underlying liability policies, including public liability, employer’s liability, product liability, or professional indemnity depending on the insurer and the structure of the cover. Remember that excess layer cover doesn’t replace your existing policy but sits on top of it, providing a higher limit of indemnity for catastrophic or contractually required risks.
What isn't covered
Excess layer insurance does not cover new risks. It only increases the limit for risks already covered by your primary policy. Therefore, anything excluded, restricted, or uninsured in your main policy would also be excluded in the excess layer. Your broker can walk you through the policy in more detail to make sure your top-up insurance fits your needs.
How much excess layer cover do I need?
The price of your excess layer insurance depends on your business's needs, the type of top-up insurance you are applying for, and factors such as your business's nature, number of employees, and location. Your broker can help you find competitively priced policies that suit your business model.
Can excess layer insurance cover multiple underlying policies?
An excess layer policy can cover multiple underlying policies, but only when it is structured as an umbrella excess policy rather than a single line excess layer. Some excess policies apply to a single underlying liability policy, while umbrella policies can potentially provide excess protection across several underlying policies, depending on their terms.
Top up your cover with Park Insurance
For over 30 years, Park Insurance has provided businesses and individuals with competitively priced insurance for all their business needs, including top-up insurance. Our position as preferred broker to some of the UK’s largest insurance providers puts us in a strong position to find appropriate cover, whether you’re a one-person operation or a multinational business. If you need additional public liability or other insurance cover, contact us today to discuss your needs.