01 / The meaning
What it means.
For example, a business may arrange a primary liability policy and another insurer’s layer above it. This is different from the excess the business contributes towards an ordinary claim. The additional layer can have its own limit, exclusions and notification obligations. Wording described as following form still needs comparison with the underlying policy and any special conditions.
Pay particular attention to what exhausts the underlying amount. Actual payment by an underlying insurer, covered defence costs, settlements or retained amounts can receive different treatment. A higher layer may not drop down because the primary policy excludes a claim or an insurer cannot pay. Keep a complete programme schedule so each insurer, limit and attachment point is clear when responding to a large allegation.
02 / Put it in context
A practical example.
Hypothetical example: a contractor faces a substantial third-party injury claim. Its broker notifies the primary insurer and the excess insurer, which separately examines whether the underlying limit has been exhausted in the manner its wording requires.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Confirm the attachment point and required underlying policies.
- Compare exclusions, defence costs and aggregation across layers.
- Check exhaustion, notification and any drop-down provisions.
04 / Start a useful conversation
A question for your broker.
What must happen before this excess layer responds, and could its wording leave a gap?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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