Excess Insurance

Understanding Excess Insurance

Excess insurance provides additional coverage that kicks in when the limits of your primary insurance policies are exhausted. For transportation businesses, this extra layer of protection is crucial given the potential for high-value claims following serious accidents.

At InsureLimos.net, we specialize in providing excess insurance tailored to the unique needs of transportation businesses, including:

Limousine services
Taxi operations
Transportation Network Companies (TNCs)
Non-Emergency Medical Transportation (NEMT)
Bus and motorcoach operators
School bus contractors
Sprinter and van services
Medical day care transportation

Why Excess Insurance Is Essential

In today's litigious environment, transportation businesses face significant liability exposures. Primary insurance limits may not be sufficient to cover catastrophic claims, putting your business assets at risk. Excess insurance provides:

Protection against large judgments that exceed primary policy limits
Defense against claims that continue after primary limits are exhausted
Peace of mind knowing your business is protected from financial ruin
Compliance with contractual requirements that mandate higher limits
Competitive advantage when bidding on contracts requiring higher coverage

How Excess Insurance Works

Excess insurance is designed to provide additional coverage beyond your primary policies:

Coverage Activation

Excess insurance activates when the limits of your underlying policies are exhausted. For example:

If your primary auto liability policy has a $1 million limit and you face a $3 million judgment, your excess policy would cover the additional $2 million (subject to the excess policy limit).
If defense costs exhaust your primary policy limits, your excess policy can take over funding the ongoing defense.
If multiple claims within the same policy period exhaust your primary aggregate limits, your excess policy provides continued protection.

Excess vs. Umbrella Insurance

While often used interchangeably, excess and umbrella insurance have important differences:

Excess Insurance: Typically follows the terms and conditions of the underlying policy and only provides additional limits for that specific policy.
Umbrella Insurance: May provide broader coverage than the underlying policies and can cover multiple primary policies under one umbrella policy.

At InsureLimos.net, we offer both excess and umbrella options to meet your specific needs and will help you determine which is most appropriate for your transportation business.

Underlying Insurance Requirements

Excess insurance policies typically require you to maintain specific underlying coverage with minimum limits. Common requirements include:

Auto Liability: Usually $1 million Combined Single Limit (CSL)
General Liability: Usually $1 million per occurrence / $2 million aggregate
Employers Liability: Usually $500,000 to $1 million

If your underlying coverage falls below these requirements or lapses, you may have a gap in protection or your excess policy may not respond to claims.

Follow Form vs. Non-Follow Form

Excess policies can be structured in different ways:

Follow Form: Adopts the same terms, conditions, and exclusions as the underlying policy, providing seamless additional limits.
Non-Follow Form: Has its own terms, conditions, and exclusions that may differ from the underlying policy, potentially creating coverage gaps or enhancements.

Our transportation insurance specialists will help you understand these distinctions and select the most appropriate structure for your business.

Transportation-Specific Excess Coverage

Transportation businesses face unique liability exposures that make excess insurance particularly important:

Catastrophic Accident Protection

Transportation businesses face the risk of catastrophic accidents that can result in multiple injuries or fatalities. Excess insurance provides crucial protection for:

Multi-passenger vehicle accidents
Accidents involving multiple vehicles
Accidents resulting in serious injuries or fatalities
Accidents involving pedestrians or cyclists
Accidents resulting in property damage to high-value structures

Regulatory Compliance

Many transportation operations must maintain higher liability limits to comply with:

Federal Motor Carrier Safety Administration (FMCSA) requirements
State transportation authority regulations
Airport authority requirements
Municipal or county licensing requirements
Client contract specifications

Special Event Coverage

Transportation services for special events may require higher limits due to increased exposure. Our excess coverage can be tailored for:

Wedding transportation
Prom and school event transportation
Corporate event transportation
Concert and sporting event shuttles
Tourism and sightseeing operations

High-Value Client Protection

When transporting high-net-worth individuals or executives, higher liability limits may be necessary to address:

Potential for higher economic damage claims
Contractual requirements from corporate clients
Reputation management concerns
Privacy and security considerations

Coverage Options and Limits

We offer flexible excess insurance options to meet the specific needs of your transportation business:

Available Limits

Our excess insurance policies offer various limit options to provide adequate protection:

$1 million excess of primary limits
$2 million excess of primary limits
$3 million excess of primary limits
$4 million excess of primary limits
$5 million excess of primary limits
Higher limits available for larger operations

Coverage Structure Options

We offer different excess insurance structures to meet your specific needs:

Single Policy Excess: Provides additional limits for one specific underlying policy (e.g., auto liability only).
Umbrella Coverage: Provides excess limits over multiple underlying policies (e.g., auto liability, general liability, and employers liability).
Layered Excess: Multiple excess policies stacked to achieve higher total limits, often with different insurers at each layer.
Shared Limit Excess: One excess limit that applies across multiple underlying policies but is shared among them.

Additional Coverage Features

Our excess insurance policies can include several valuable features:

Drop Down Coverage: In certain circumstances, your excess policy may "drop down" to replace primary coverage if the primary insurer becomes insolvent.
Worldwide Coverage Territory: Protection that follows you when operating in approved international locations.
Broad Named Insured Provisions: Coverage for multiple entities under your corporate structure.
Additional Insured Status: Extends excess coverage to clients or other parties as required by contract.

Premium Factors

Several factors influence your excess insurance premium:

Underlying Policy Limits: Higher underlying limits generally result in lower excess premiums.
Vehicle Types and Uses: Larger vehicles or those with higher passenger capacities may require higher premiums.
Driver Experience and Safety Records: Better driver records typically result in lower premiums.
Claims History: Prior excess claims can significantly impact premium costs.
Geographic Territory: Operating in areas with higher claim frequencies or severities may increase premiums.
Attachment Point: The limit at which the excess policy begins to provide coverage.

Risk Management for Excess Liability

Effective risk management is crucial for controlling excess liability exposures:

Driver Safety Programs

Since catastrophic auto accidents are a primary concern for excess insurers, comprehensive driver safety programs are essential:

Thorough driver screening and background checks
Ongoing driver training and education
Regular license and record verification
Telematics and driver monitoring systems
Fatigue management programs
Distracted driving prevention policies
Substance abuse testing programs

Vehicle Safety

Well-maintained vehicles with appropriate safety features can reduce the likelihood and severity of accidents:

Regular preventive maintenance programs
Pre-trip and post-trip inspection procedures
Advanced safety technology adoption
Collision avoidance systems
Electronic stability control
Lane departure warning systems
Automatic emergency braking

Operational Procedures

Safe operational practices can significantly reduce liability exposure:

Comprehensive safety policies and procedures
Inclement weather protocols
Passenger management procedures
Route planning and hazard avoidance
Emergency response planning
Documentation and record-keeping systems

Claims Management

Effective claims handling can prevent primary claims from reaching excess layers:

Immediate accident response protocols
Thorough accident investigation procedures
Early intervention in potentially severe claims
Coordination between primary and excess insurers
Strategic settlement approaches
Legal defense team selection and management