Which type of excess insurance addresses loss frequency by providing coverage once a cumulative per occurrence loss limit is breached?

• A. Specific Insurance
• B. Umbrella Insurance
• C. Aggregate Insurance
• D. Primary Insurance

Answer: (C)

Excess insurance that is written on an aggregate basis is designed to cover multiple losses over a policy period. The idea is that the insurer steps in after the total of losses from numerous claims reaches a specified cumulative amount, then provides coverage for additional losses up to its limit. This structure specifically addresses loss frequency, because it handles how many claims occur over time rather than just paying out a single large claim.

So when the description mentions providing coverage once a cumulative per occurrence loss limit is breached, it aligns with an aggregate excess arrangement: once the aggregate total across occurrences hits the set threshold, the excess policy attaches and continues to cover subsequent losses up to its own limit.

Specific insurance would apply to a single event or claim; umbrella policies typically sit on top of underlying coverages and can be structured in various ways, but the scenario described is characteristically aggregate excess. Primary insurance is the first layer of coverage and doesn’t address the breaching of an aggregate cumulative limit.