For an excess liability claim to be filed, a final judgment or settlement must have been entered against the insured, and the amount must be in excess of the insured's policy limit.

For an excess liability claim to be filed, a final judgment or settlement must have been entered against the insured, and the amount must be in excess of the insured's policy limit.

• A. The insured must have paid that judgment.
• B. The amount of the judgment must be in excess of the insured's policy limit.
• C. Evidence of bad faith must be produced.
• D. The insurer must have determined that coverage does not apply.

Answer: (B)

Excess liability claims hinge on the amount exceeding the policy limit after liability is finally determined. When there’s a final judgment or settlement against the insured, only the portion that goes beyond the policy limit is pursued as an excess claim against the insurer. If the amount is within the policy limit, there’s no excess claim because the primary policy would cover it up to that limit. The insured paying the judgment isn’t a prerequisite for filing the excess claim, and bad faith evidence isn’t required to pursue it. Nor is a denial of coverage necessary—the excess claim focuses on the amount exceeding the policy limit, regardless of any initial coverage determination.

Excess liability claims hinge on the amount exceeding the policy limit after liability is finally determined. When there’s a final judgment or settlement against the insured, only the portion that goes beyond the policy limit is pursued as an excess claim against the insurer. If the amount is within the policy limit, there’s no excess claim because the primary policy would cover it up to that limit.

The insured paying the judgment isn’t a prerequisite for filing the excess claim, and bad faith evidence isn’t required to pursue it. Nor is a denial of coverage necessary—the excess claim focuses on the amount exceeding the policy limit, regardless of any initial coverage determination.