EXCAVATION INSURANCE GROUP
What Happens If a Claim Exceeds My Excess Limits?
Excavation Insurance Group explains who absorbs a claim once every layer of coverage is exhausted, and how to size an excess tower to a realistic worst-case exposure.
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Quick answer: If a claim exceeds the combined total of your underlying and excess limits, the business, and potentially the owner personally, is responsible for whatever’s left. There’s no policy above the top of your tower to catch the overage unless you’ve bought a higher layer. Excavation Insurance Group treats this scenario as the entire reason excess and umbrella coverage exists: sizing the tower to what a worst-case excavation claim could realistically cost, not just what a bid packet minimally requires.
WHO ABSORBS THE GAP
Once every layer of coverage is exhausted, the remaining balance of a judgment or settlement becomes a direct liability of the business. Depending on how the business is structured and the specifics of the situation, that exposure can extend to personal assets, particularly in cases involving gross negligence or where corporate protections don’t fully shield an owner. This is the scenario every layer of an excess or umbrella program is built to prevent, and it’s exactly why “how much is enough” should be answered by looking at realistic worst-case severity for excavation work (a serious utility strike, a cave-in with lasting injury), not just the minimum a current contract happens to require.
HOW TO SIZE YOUR TOWER SO THIS DOESN’T HAPPEN
There’s no universal number that guarantees a claim will never exceed your limits, severity risk can’t be eliminated entirely. What a proper coverage review does is size your combined limits against the realistic worst-case exposure of the work you actually do, factoring in your fleet, crew size, and the type of jobs you’re bidding, rather than defaulting to whatever the lowest bid packet on your desk happens to require. Contractors who treat their excess limit as a moving target that grows with their business, rather than a number set once and forgotten, are the ones least likely to ever find themselves in this exact situation.
Back to the Excess and Umbrella Insurance for Excavation Contractors hub. Related: Does Excess Coverage Cover Legal Defense Costs? and When Should a Growing Excavation Contractor Add Excess Coverage?
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