What is an Excess Layer Insurance Policy?

Nowadays, it is becoming increasingly common for Contractors to be asked to have increased limits on their Contractors Liability Insurance however, most insurers are not keen to give limits in excess of £5m for Public Liability or £10m in respect of Employers Liability, so an Excess Layer Insurance policy has become a cost-effective way of purchasing higher limits of indemnity.

Excess Layer Insurance, also known as Excess of Loss, is a policy designed to provide increased limits of liability over your primary insurance cover.

For Example:

A Groundworks company has £5,000,000 Public Liability under their current insurance, but they have been requested to hold £10,000,000 for a contract they are starting.

The Excess Layer Insurance Policy will provide the £5,000,000 over the insured existing £5,000,000 to give a total of £10,000,000

For many years, £5m Public Liability was considered an adequate minimum amount but many local authorities or larger businesses are likely to insist on liability limits of £10m and upwards for their contractors regardless of the trade.

Manufacturers also need to consider if their current Products Liability Insurance is still adequate as the indemnity limits are normally aggregated for their products and the limit may become exhausted should their products cause multiple accidents.

An Excess Layer can be provided on an annual basis or as a single contract duration if required. It can also provide you with a lower cost alternative than asking your primary existing Insurers to carry the increased liability exposure.

One of the major implications of the Ogden decision is the adequacy of an insureds limits of Indemnity for Public & Employers Liability Insurance. An Increasing number of contracts are likely to state that previously accepted limits of indemnity are no longer acceptable due to the potential for large liability claims. As a result many insureds will need to purchase an Excess Layer policy in order to fulfil contract obligations or avoid any potential underinsurance.

Benefits of an Excess Layer

• Excess layers can be provided up to £50m on Employers & Public Liability
• Competitive premiums
• Single contract or annual policy quotes
• Higher risk activities with heat, depth and height requirements can also be underwritten.

Clarke Williams can provide the following Excess Layer Policies:

• Excess Employers Liability
• Excess Public Liability
• Excess Products Liability
• Excess Professional Indemnity
• Excess Commercial Motor (third party property damage)

Minimum premiums start from £400 for most trades and £750 for higher risk trades such as Cladding Contractors and Scaffolders.

To learn more about what Excess Layer Insurance call or email one of our advisors. We are always happy to talk, so get in touch today to discuss.