When I first entered commercial insurance, one of the concepts that seemed most intimidating was the excess liability tower.
Coming from outside the industry, it was easy to assume that a policy simply covered a business up to one stated limit. As I gained experience supporting underwriters, I realized that large organizations often purchase multiple layers of insurance that work together to provide significantly higher limits of protection.
An excess liability tower is exactly what it sounds like—a stack of insurance policies that sit on top of one another.
The foundation is typically a primary liability policy. Once the limits of that policy are exhausted by a covered loss, the next insurer in the tower begins paying. Additional insurers may continue providing coverage in successive layers until the total purchased limit has been reached.
For example, a company may purchase a tower providing $25 million in total coverage. Rather than having a single insurer assume the entire risk, several insurance carriers may each participate in different layers of the tower.
This approach benefits both the insured and the insurance market. Businesses obtain the higher limits they need, while individual insurers manage their exposure by assuming only a portion of the overall risk.
One lesson I’ve learned is that commercial underwriting isn’t simply about evaluating whether a business is a good risk. Underwriters must also understand where their organization fits within the larger insurance program. A carrier writing the primary layer often faces different considerations than one writing an excess layer several million dollars above the ground-up exposure.
Working in underwriting support introduced me to these concepts early in my career. While I wasn’t making underwriting decisions myself, I had the opportunity to see how submissions were structured, how different markets participated in a program, and how multiple insurers collaborated to provide comprehensive coverage for complex commercial accounts.
The more I study commercial insurance, the more I appreciate how much strategy exists behind every placement. Understanding the purpose of an excess liability tower isn’t simply about learning industry terminology—it’s about recognizing how carriers work together to balance capacity, profitability, and risk.
As I continue working toward a full underwriting role, concepts like layered insurance programs remind me that great underwriting combines technical knowledge with thoughtful risk evaluation. Every layer of a tower tells part of a larger story about how risk is shared across the marketplace.