Excess of Loss Clause Samples
The Excess of Loss clause defines a type of insurance coverage where the insurer is responsible only for losses that exceed a specified amount, known as the retention or attachment point. In practice, this means the policyholder or a primary insurer covers losses up to a certain threshold, and the excess insurer pays only for amounts above that threshold, up to a stated limit. This arrangement is commonly used in reinsurance and large commercial insurance programs to protect against catastrophic or unusually large losses. The core function of the Excess of Loss clause is to limit the insurer's exposure to high-severity claims, thereby providing financial stability and predictability for both insurers and insured parties.
Excess of Loss. Commutation Agreement
Excess of Loss. Under excess of loss, the Ceding Company and the reinsurer do not share loss in a fixed percentage. The Ceding Company is allowed to select the maximum amount it can conveniently bear in case of loss and the reinsurer undertakes to pay all losses above this amount. Retention under excess loss is usually high and any excess above the retention is recoverable from the reinsurer. Some reinsurers arrange up to three or four excess of loss cover and the cover are express in layers. The layers can be;
1. Catastrophe layer or
2. Working layer
Excess of Loss. Cover effective January 1, 1993 between Florida Retail Federation Self Insurers Fund and Lloyd's London.