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ILLINOIS CAPTIVE & ALTERNATIVE RISK FUNDING INSURANCE ASSOCIATION
Excess InsuranceDefinitionExcess insurance is the transfer of risk to an insurance
carrier through the issuance of a policy to the insured. Excess insurance
may be used to supplement primary insurance on an excess basis or provide
coverage above a self-insured retention. Advantages:
Disadvantages:
How it works:The insured purchases a direct excess insurance policy from carriers who specialize in this type of insurance product. If the insured has primary insurance coverage, frequent, smaller claims would normally be subject to a deductible. Under a deductible, the insurer handles the claims activity and charges the insured for the deductible amount under each claim. Larger insureds may have a self- insured retention, in which case the insured or a third party would handle claims. Under either a primary insurance policy or self-insured retention, the excess insurer must be advised of potential claims as set forth under the terms of the excess insurance contract. Some excess carriers reserve the right to become directly involved in the settlement of the underlying claims.
Back to ICARFIA Home page Send E-Mail to ICARFIA for more information 2003 Contact Information: Chad Kunkel |
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