Excess Liability Insurance: What It Costs, How Towers Work, and Why $1M in GL Isn’t Enough Anymore (2026)

Excess liability insurance costs about $600 a year for each $1 million of coverage for a small business, according to Insureon, and excess premiums commonly run 50% to 100% of the premium on the underlying policy. Mid-market companies pay more in total because they buy $10M to $25M of limits across several carriers, but they pay less for each additional million as the layers climb. Industry, attachment point, and loss history move the number more than anything else.

The cost is rising while the risk behind it gets bigger. US casualty rates rose 7% in Q2 2026, or 11% excluding workers’ comp, according to Marsh’s Global Insurance Market Index. Marathon Strategies counted nearly 200 corporate verdicts of $10 million or more in 2025, up 40.7% from 2024, and Texas ranked among the top states. A $1M general liability limit is now the floor, not the ceiling, and excess liability is what fills the gap above it.

How Much Does Excess Liability Insurance Cost in 2026?

Excess liability insurance costs roughly $600 per $1 million per year at the small-business end of the market and is usually priced as a share of the underlying premium for larger accounts. The first million above your primary policy is the most expensive million you’ll buy. Every layer above it costs less per million because fewer claims ever reach that high.

Here’s how that plays out for a mid-market buyer. Excess pricing starts from the underlying premium, so a construction company or fleet operator with an expensive primary GL and auto program pays far more for its first excess layer than a professional services firm with the same revenue. Beyond industry, four inputs set the quote:

• Attachment point: a layer that attaches at $1M costs more per million than one attaching at $16M
• Underlying limits: carrying $2M/$4M primary instead of $1M/$2M can lower excess pricing because the excess attaches higher
• Loss history: a single large claim in the past five years changes how every layer prices
• Auto exposure: fleets drive excess pricing more than any other exposure, because commercial auto produces the largest verdicts
• Jurisdiction: operations in Texas, California, Florida, and Georgia price with higher verdict risk

How Is an Excess Liability Tower Priced Layer by Layer?

An excess liability tower is priced from the bottom up: the lead layer carries the highest rate per million, and each layer above it is cheaper per million because it’s less likely to be reached. Below $10M in total excess, many companies buy one policy from one carrier. Above that, carriers cap how much they’ll put on a single account, so the program becomes a stack.

Each layer also requires its own carrier, its own submission, and terms that line up with the layer below. If the lead carrier narrows its terms at renewal, following-form layers above it inherit the change. Capacity above $25M has tightened too: a contractor who paid $400,000 for $100M in excess a few years ago might now pay triple that and get only $25M, according to World Insurance Associates. That compression hasn’t eased in 2026.

What Is the Difference Between Excess Liability and Umbrella Insurance?

Excess liability adds limits above one specific underlying policy and follows that policy’s exact terms, while umbrella insurance sits above several policies at once and can broaden coverage to fill gaps between them. That’s the whole structural difference. The terms get used interchangeably by carriers and brokers, which is how companies end up with the wrong one in a contract.

Contract language usually decides it. “GL limits of $5M per occurrence” is answered precisely by $4M of excess over a $1M primary. “$5M umbrella/excess required” is safer with an umbrella. Most companies needing $10M or more use both: an umbrella as the lead layer for breadth, then excess layers above it for cost-efficient limits. Our umbrella insurance cost guide covers when an umbrella makes financial sense on its own.

Why Is $1M in General Liability No Longer Enough?

A $1M general liability limit is no longer enough because corporate jury verdicts of $10 million or more have become routine. Marathon Strategies identified nearly 200 of them in 2025, totaling about $25.6 billion, with 40 “thermonuclear” verdicts above $100 million and four above $1 billion, as reported by Claims Journal. That followed a record 2024, when 135 nuclear verdicts totaled $31.3 billion.

• Texas exposure: Texas, California, Florida, and Maryland ranked highest for nuclear verdicts in 2025, which matters for any company operating out of Houston
• Juror attitudes: only 56% of Americans now say there are too many lawsuits, down from 90% in 2016, according to Swiss Re
• Litigation funding: third-party funders bankroll plaintiffs, which removes the pressure to settle early
• Trial tactics: “reptile theory” frames defendants as threats to community safety and pushes awards higher
• Tort reform: eight states enacted reforms in 2025, but Florida’s 2023 reform didn’t keep it out of the 2025 rankings

Product liability (23.6%), auto accidents (22.8%), and medical liability (20.6%) account for about two-thirds of nuclear verdicts, according to the Institute for Legal Reform. If your business has exposure in any of those three, excess limits above $1M aren’t optional.

Who Needs Excess Liability Insurance?

Any business where a single claim could exceed its primary limit needs excess liability. For mid-market companies, one of these five triggers almost always applies:

• Contract requirements: General contractors, property owners, energy operators, and government contracts routinely require $5M–$25M in total limits. You cannot bid without them.
• Public-facing operations: Retail, hospitality, healthcare, and any business with significant foot traffic or premises exposure.
• Fleet operations: Commercial auto drives the largest verdicts. A trucking fleet without excess is one bad accident away from insolvency.
• Products in the market: Manufacturers, distributors, and retailers face product claims that routinely exceed $1M when injuries are severe.
• Professional services at scale: A bad recommendation to a large client can exceed $1M in damages. E&O excess is common for accounting, engineering, and consulting firms.

How Should a $20M–$200M Company Structure an Excess Tower?

A company with $20M to $200M in revenue should structure its excess tower around five decisions: lead carrier, layer sizing, policy form, attachment points, and renewal timing. Get those right and the limits respond as one program. Get one wrong and a claim can stall between layers.

1. Lead carrier selection. The lead umbrella carrier sets the terms for the whole tower, because following-form layers inherit its exclusions. Pick the lead for terms first (completed operations, contractual liability, products) and price second.

2. Layer sizing. A $25M tower can be split $5M/$10M/$10M or $10M/$5M/$5M/$5M. Two $5M layers sometimes cost less than one $10M layer, and more carriers means more options if one non-renews.

3. Following-form vs. independent terms. Following-form layers inherit the lead’s terms and avoid gaps. Independent-form layers carry their own terms, which can create disputes on a claim that spans several layers.

4. Attachment points. Each layer attaches where the one below exhausts. If limits are mis-sized, a claim can exhaust one layer without reaching the next carrier’s attachment.

5. Renewal coordination. Four carriers means four submissions. Align renewal dates and manage lead-carrier terms before renewal, because a change at the lead flows up the tower. Our umbrella cost guide covers the lead layer decision in more detail.

The mistakes we see most often in mid-market towers:

• Buying limits without reading terms: pollution, professional liability, and employee benefits liability exclusions in the lead layer carry up the whole tower
• Single-carrier dependency: if that carrier non-renews after a large claim, the entire tower has to be rebuilt at once
• Ignoring E&S capacity: for layers attaching above $15M, excess and surplus lines carriers often bring more capacity than admitted markets
• Setting limits on last year’s exposure: with verdicts up 40.7% in a year, limits should be reviewed at every renewal
• Letting contracts drive structure blindly: contract minimums are a floor, not a measure of your actual verdict exposure

For the broader umbrella-versus-excess decision at smaller limits, see our guide to what $1M in umbrella coverage costs.