What does excess liability insurance provide?

Excess liability insurance is designed to provide additional coverage on top of the limits of a primary liability policy. This type of insurance becomes active once the underlying policy has reached its limit due to a claim. For instance, if a primary general liability policy has a limit of $1 million and a claim exceeds that amount, the excess liability policy can cover the additional costs, offering further financial protection to the policyholder.

This differs from the other options. Coverage for non-covered claims refers to specific incidents or damages that are not included in a policy's terms; excess liability does not extend to such circumstances but instead supplements underlying policy limits. Insurance for personal property focuses on protecting tangible items owned by the insured, rather than covering liability. Basic mandatory coverage typically refers to minimum required insurance that must be held, often defined by law, but does not provide the broader protections that excess liability insurance offers.