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floating excess policy

An excess policy that applies its limits in excess of more than a single primary policy. Floating excess forms are most commonly written to apply excess of an insured company's primary directors and officers (D&O), employment practices, and fiduciary liability policies. In effect, its limits are available to "float" between and among the limits provided under these (and other) types of primary policies when they are exhausted by claim payments. In the event that one or more claims exceed these primary/underlying limits, the limit of the floating excess policy can be applied in any combination—up to the floating excess policy's limit—to one or more losses. Floating excess policy forms are nearly always written on a "straight" excess basis, whereby they follow the wording of the underlying policies and therefore do not "drop down" (i.e., provide broader coverage) in the event that a particular claim is not covered/excluded by the primary form. See also Excess liability policy.


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