Controls loss severity by placing a cap on losses the insured must pay arising out of a single occurrence. What is specific excess insurance?

• A. A form of coverage that caps losses per single occurrence.
• B. A form of reinsurance that shares losses with another insurer.
• C. A standard workers' compensation policy.
• D. A policy covering only medical benefits.

Answer: (A)

Specific excess insurance is coverage that sits above the insured’s primary coverage and any self-insured retention to control the amount the insured must pay for any single incident. It kicks in after the insured’s own share has been exhausted for that occurrence and pays the remaining amount up to its stated limit, effectively capping the insured’s out-of-pocket loss per event. This type of coverage is used to manage loss severity for large claims on a per-occurrence basis. It isn’t a form of reinsurance between insurers, nor is it a standard workers’ compensation policy or a policy that covers only medical benefits.