What does "excess insurance" provide?

Excess insurance is designed to provide additional coverage that extends beyond the limits set by a primary insurance policy. This means that when a claim exceeds the coverage limits of the primary insurance, the excess policy will kick in to cover the additional costs. It's a way for policyholders to secure greater financial protection against high-value claims or losses that might otherwise exceed their primary policy's limits.

In commercial insurance practices, excess insurance is particularly valuable for businesses that may face significant liabilities or losses that could easily surpass their primary coverage. This type of policy ensures that there is a buffer to cover larger claims without the insured having to bear the full financial burden.

The other options, such as providing coverage equivalent to the primary policy or offering limitations below the primary coverage, do not accurately describe the role of excess insurance. Additionally, excess insurance does not focus solely on disaster coverage options; it can apply across various types of claims and risks.