What is true regarding the specific excess insurance?

Specific excess insurance is designed to provide coverage above a defined retention limit, often referred to as a self-insured retention (SIR). This means that the insured must cover losses up to that retention limit before the specific excess insurance kicks in and offers coverage for losses that exceed that amount.

This structure allows businesses to manage their risk by retaining a portion of the losses themselves while still having financial protection for larger claims that go beyond their self-insured retention. By doing so, it acts as a buffer for significant financial exposures.

The other options do not accurately describe the nature of specific excess insurance. For instance, stating that it covers all business risks disregards the limitation imposed by the self-insured retention, which is a key component of how the insurance functions. Additionally, it is not exclusively applicable to property insurance, as it can also apply to liability insurance and other forms of coverage. Finally, asserting that it is a standard feature in all insurance policies overlooks the fact that specific excess insurance is a specialized coverage that may not be included in standard policies without specific arrangement or endorsement.