What Is the Difference Between Umbrella and Excess Insurance?

Umbrella insurance

Businesses need a variety of liability insurance policies to cover their exposures. There are sometimes when you exceed the policy limit when a claim is settled. Understanding the differences between umbrella vs. excess liability policies can help you determine which is best for your business.

Key Difference

The experts at Byrnes Agency Insurance state that umbrella policies often offer additional coverages while excess liability provides higher limits yet follows the limits of the liability policy. Excess liability may have more limitations than the underlying liability policy. Umbrella insurance, on the other hand, can help fill in policy gaps.

Assess Risks

To choose the right policies to add to your insurance coverage, you need to assess your business risks. Where does the business have the most claims? Analyzing the risks can help you see where there are gaps in coverage.

Policy Choice

For a company with companies throughout the world, an umbrella policy may offer broader coverage for those increased liabilities. Some companies may need additional liability coverage only in specific areas for specific items. These companies can benefit from an excess policy with additional limitations. Choose the one that best addresses the business’ risks.

These differences between umbrella vs. excess insurance can make a difference for your business claims. The business may need one or both policies for full coverage.

The Difference Between Excess and Umbrella Insurance

excess liability vs umbrella

When shopping for insurance you may have heard the terms “umbrella” and “excess” liability insurance. Upon first glance, these policies seem to do the same thing. Both appear to pitch in when your starting, or underlying policies, fail to meet your particular claim’s need. However, they are actually two different coverages, and it is important to know what that difference is before you finalize your insurance package. Here is a brief overview of excess liability vs umbrella coverage.


As stated before, both insurance policies are purchased in case there is a scenario in which your initial insurance policies don’t have the limits and coverage you need. They are especially crucial for businesses as they can witness a whole array of incidents.


The difference lies in whether or not they provide an increase in coverage. Umbrella liability provides both higher coverage and increased limits. Umbrella can also be applied a whole number of your underlying policies. However, excess liability only includes an increase in limits. Excess liability does cover situations that are not already in your policy. This line can also be applied to only one policy at a time.

While the difference between excess liability vs umbrella coverage may feel confusing, please know that you likely require one or the other if you really to be fully protected.