How to Structure an Excess Liability Tower for $20M–$200M Revenue Operations (2026)

An excess liability tower is a stack of insurance policies from multiple carriers that provides total liability limits beyond what any single carrier is willing to write. Below $5M in excess, one carrier handles it. Above $10M, you’re layering two to five carriers, each taking a portion of the risk at different attachment points. The tower structure determines what you pay, how claims flow between layers, and whether gaps appear during a catastrophic loss. Getting it right is the difference between full coverage and discovering at the worst possible moment that your second layer doesn’t follow the terms of your first.

For mid-market companies with $20M–$200M in revenue, the typical tower provides $10M–$25M in total excess limits above a $1M/$2M primary GL. The cost of this tower runs $10,000–$50,000 per year depending on industry and structure. The key decisions — lead carrier selection, layer sizing, following-form terms, and attachment point negotiation — are where broker expertise either saves or costs you tens of thousands of dollars annually.

The Five Decisions That Determine Tower Quality

1. Lead carrier selection. The lead umbrella carrier sets the terms for the entire tower. Every layer above it either follows those terms or negotiates exceptions. A lead carrier with broad terms (especially around completed operations, contractual liability, and products liability) creates a stronger foundation. A lead with narrow terms or aggressive exclusions weakens every layer above it, because following-form excess policies inherit those same exclusions. Your broker should select the lead carrier for terms first, price second.

2. Layer sizing. In a $25M tower, you can split the excess into $5M/$10M/$10M or $10M/$5M/$5M/$5M or any other combination. The right split depends on carrier willingness (some only write $5M per account), pricing (sometimes two $5M layers cost less than one $10M), and renewal flexibility (more carriers = more options at renewal if one non-renews).

3. Following-form vs. independent terms. Following-form excess policies inherit the lead umbrella’s terms exactly. Independent-form excess policies have their own terms, which may be broader or narrower. Following-form is simpler and avoids gaps. Independent-form is sometimes necessary when a carrier won’t follow another carrier’s terms — but it creates potential for coverage disputes during a claim that spans multiple layers.

4. Attachment points. Each layer attaches where the one below it exhausts. The attachment point determines when each carrier’s obligation begins. If a claim exhausts the primary and lead umbrella but doesn’t reach the second excess layer’s attachment point, that carrier pays nothing. Properly sized layers ensure no gaps between exhaustion and attachment.

5. Renewal coordination. A tower with four carriers means four separate renewal dates, four underwriting submissions, and four sets of terms to negotiate. If the lead carrier changes terms at renewal, every following-form layer above it changes automatically — sometimes in ways the insured doesn’t expect. Coordinating renewals to common dates and managing lead-carrier terms proactively is where broker value is highest. Our umbrella cost guide covers the lead layer decision in more detail.

Common Tower Mistakes Mid-Market Companies Make

Buying limits without checking terms. A $25M tower means nothing if the lead umbrella excludes the exposure that actually matters to your business. Pollution exclusions, professional liability gaps, and employee benefits liability carve-outs are the most common blind spots. Every layer of the tower inherits these exclusions if it’s following-form.

Single-carrier dependency. Placing the entire tower with one carrier (when they’ll write it) seems simpler. It’s also riskier. If that carrier non-renews at the end of the policy period — which happens routinely after a large claim — you’re rebuilding the entire tower from scratch with no incumbent carrier relationships. Multi-carrier towers diversify this risk.

Ignoring the E&S market. Admitted carriers (standard market) offer stability and guaranteed terms. E&S carriers offer flexibility, higher capacity, and willingness to write risks the admitted market won’t touch — but with less regulatory protection. For the upper layers of a tower ($15M+ attachment), E&S carriers often provide better pricing and capacity than admitted carriers. A broker who only works with admitted carriers is leaving money and capacity on the table.

Setting limits based on last year instead of next year’s exposure. If nuclear verdicts grew 52% in a single year, the limits that protected you in 2024 may not protect you in 2026. Annual limit adequacy reviews should be part of every renewal discussion — not an afterthought when a claim exceeds coverage.