What does 'excess insurance' typically provide?

Excess insurance is designed to provide coverage for claims that exceed the limits of a primary insurance policy. It acts as an additional layer of protection, offering financial support when the primary insurance coverage is no longer sufficient to handle large claims. This type of insurance is particularly useful for businesses or individuals who want to ensure they are fully safeguarded against substantial liabilities that might arise.

In contrast, other options focus on aspects that do not align with the fundamental purpose of excess insurance. For instance, excess insurance does not inherently offer lower premiums than standard insurance, nor is it related to specific peril coverage such as natural disasters. Additionally, excess insurance does not typically exempt policyholders from deductibles; rather, the deductibles stipulated in the primary policy still apply before the excess coverage kicks in. This understanding helps clarify the function and intent behind excess insurance in the broader context of risk management strategies.