In an arrangement where the primary insurer pays first and the excess insurer pays after the primary limits are exhausted, what term applies?

• A. Primary and Excess
• B. Per Occurrence
• C. Aggregate
• D. Split Liability

Answer: (A)

When multiple layers of liability coverage exist, the first policy to respond is the primary, paying up to its limit, and any remaining loss is covered by the excess policy above it. This structure describes a primary and excess arrangement. It clarifies how payments flow: the primary policy handles claims until its limit is exhausted, then the excess policy steps in to cover the rest, within its own limit. This concept is distinct from per occurrence (limits apply to each incident), aggregate (the total limit available for all claims in the policy period), and split liability (coverage divided between different carriers for different parts of liability). So the described setup fits the label primary and excess.