How does "shared" liability insurance differ from "excess" liability insurance?

Shared liability insurance is designed to provide coverage for multiple parties involved in a single event or situation. This type of insurance is often used in scenarios where more than one individual or entity may be held liable for damages or injuries. For example, in a car accident involving multiple vehicles, shared liability coverage allows each party to have a defined limit of liability that is available to pay claims made against them.

Excess liability insurance, on the other hand, kicks in after the limits of an underlying policy (such as general liability or auto liability) have been exhausted. It provides additional coverage beyond the specified limits of the primary insurance policy, offering an extra layer of protection for larger claims or lawsuits that exceed those limits. This is particularly important in high-risk situations where the risk of claims exceeding standard policy limits is significant.

The distinction lies in the focus: shared liability addresses coverage among multiple parties for a single incident, while excess liability offers supplementary protection when standard limits have been surpassed. Understanding this difference is crucial for those seeking to adequately protect themselves and their assets in liability situations.