Businesses buy insurance coverage to protect them from liability for various insured risks, and in many cases to shift to the insurer the burden of defending lawsuits.
An insurer providing primary liability coverage generally requires the payment of relatively high premiums to compensate it for assuming a duty to defend the insured against lawsuits that potentially implicate coverage. In contrast, an excess/umbrella insurer usually charges lower premiums than the primary insurer since its duty to defend is much narrower.
Coverage under a typical excess/umbrella insurance policy is divided into two parts: Coverage A and Coverage B.
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