Excess insurance is insurance that covers the insured against certain risks and applies only to loss or damage in excess of a stated amount, or of a specified primary insurance policy or amount of self-insurance.

Although the terms excess liability insurance and umbrella insurance are sometimes used interchangeably, there is an important distinction. Excess liability insurance provides additional coverage for one of your primary liability insurance policies (general liability insurance, commercial general liability insurance) and kicks in with an additional amount of coverage under the same terms as the underlying, primary policy. Umbrella insurance provides additional coverage for several underlying liability policies and kicks in when proceeds from one of those policies reaches its limit.

In insurance industry jargon, both excess liability insurance policies and umbrella insurance policies are said to “sit on top of” the underlying liability insurance policy or policies.

In Virginia, excess insurance is a type of coverage that provides additional protection beyond the limits of the insured's primary policy. It is designed to cover claims that exceed the amount of coverage in the primary policy, acting as a safety net for large or catastrophic losses. Excess liability insurance specifically adds extra coverage to one primary liability policy, such as general liability or commercial general liability, and follows the terms of that underlying policy. Umbrella insurance, on the other hand, extends coverage over multiple underlying liability policies, such as auto, general liability, or employers' liability insurance, and can offer broader coverage in some cases. Both types of insurance 'sit on top of' the primary policies, providing an extra layer of financial protection. Virginia's regulations on excess and umbrella insurance are consistent with general insurance principles, and these policies are regulated by the Virginia Bureau of Insurance, which ensures that insurance carriers comply with state statutes and regulations.