What is a policy excess?

The 'excess' is the first portion of a professional indemnity loss or claim which is borne by the insured. An excess can be either voluntary to obtain a lower premium or imposed due to underwriting reasons. The intention of the excess is in part to give the policyholder a financial stake in minimising the risk of a claim occurring with the financial cost being a reason to avoid the situation happening. It also avoids smaller claims being paid under the policy for amounts which fall within the policy excess.