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Simple English definitions for legal terms
excess limits
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A quick definition of excess limits:
Excess limits refer to insurance coverage that protects against losses that exceed a certain limit. This means that if something happens that causes a loss greater than the specified limit, the excess limits coverage will kick in to cover the additional costs. It's like having a safety net in case something goes wrong.
A more thorough explanation:
Definition: Excess limits refer to insurance coverage that protects against losses that exceed a specified limit.
Example: Let's say you have car insurance with a liability limit of $100,000. If you get into an accident and the damages exceed $100,000, your excess limits coverage would kick in to cover the remaining costs.
Explanation: Excess limits coverage is designed to provide additional protection beyond the limits of a standard insurance policy. In the example above, the excess limits coverage would cover any damages that exceed the $100,000 liability limit of the car insurance policy. This type of coverage is often used by individuals or businesses that face higher risks and want to ensure they are fully protected in the event of a catastrophic loss.