In excess insurance, which term describes insurance that provides coverage after a self-insured retention or underlying policy layer?

• A. After the self-insured retention or underlying policy layer
• B. From the start of the policy
• C. After the entire policy limit is reached
• D. Only after a claim is filed

Answer: (A)

In excess insurance, coverage sits above a self-insured retention (SIR) or underlying policy and only attaches once that layer has been satisfied. This means losses are paid first by the retention or the underlying policy, and the excess policy steps in to cover additional losses up to its own limit. That is why describing it as coverage that begins after the self-insured retention or underlying policy layer is correct. It does not start at the policy’s inception, it doesn’t wait until the entire policy limit is used, and it isn’t triggered simply because a claim is filed—the trigger is the exhaustion or satisfaction of the underlying layer. For example, with a $500,000 SIR and a $2,000,000 excess policy, the first $500,000 is paid from the retention/underlying policy, and the excess policy pays any amount above that, up to $2,000,000.