Why would my business be required to have an Excess Liability Insurance policy?

A business may be required to have an Excess Liability Insurance policy for several reasons, including legal, contractual, or regulatory obligations, as well as practical risk management considerations.

Here are some scenarios in which a business might be required or strongly advised to carry Excess Liability Insurance:

Contractual Obligations: Business contracts often include liability insurance requirements. Clients, vendors, landlords, or partners may stipulate that your business maintains specific levels of liability coverage, which can include Excess Liability Insurance, to protect against large claims.

Government Contracts: If your business works with government agencies, they may have specific insurance requirements, which can include higher liability coverage than your primary policies offer.

Industry Standards: In some industries, such as construction, healthcare, or aviation, maintaining excess liability coverage is considered a best practice to manage the heightened risks associated with the field.

Protection of High-Value Assets: If your business owns significant assets, such as real estate, valuable equipment or inventory, carrying Excess Liability Insurance can help protect these assets from being at risk in the event of large liability claims.

Risk Management: Businesses that face a higher likelihood of large liability claims, such as those involved in construction, healthcare or manufacturing, may carry Excess Liability Insurance as part of their comprehensive risk management strategy.

Lease or Mortgage Requirements: Property owners, landlords, or lenders may require businesses to maintain specific liability coverage, including Excess Liability Insurance, as a condition of their lease or mortgage agreements.

Protection Against Catastrophic Claims: Large businesses or those with substantial assets often carry excess liability coverage to safeguard their financial well-being in the face of catastrophic or high-value liability claims.