Excess liability sits above an underlying policy and generally follows its terms, paying once the underlying limit is exhausted. An umbrella can do the same, but may also cover some exposures the underlying policy does not, dropping down to act as primary for those, subject to a self-insured retention.
Updated September 2026.
Why brokers care
Contracts often specify a total limit that can only be reached by stacking a primary policy and something above it. Whether that something is umbrella or excess changes what happens at claim time. A following form excess policy is only as broad as what sits beneath it, so a gap in the underlying policy is a gap in the excess as well, even though the certificate shows a large combined figure.
What to check
- Whether the policy above is umbrella or following form excess
- Which underlying policies are scheduled beneath it
- Any self-insured retention, and who is responsible for it
- Whether additional insured status extends to the upper layer
- Whether the contract requires the upper layer to be as broad as primary
Common mistake
Adding the layers together and treating the total as the answer. A following form excess policy inherits the gaps beneath it, so a large combined figure can still fail to respond to the exposure the contract cared about.
Stacked limits are covered in the certificate review checklist.