Manual Excess
Categories: Insurance
Things have been humming along for our international shipping company, Great Freight, Inc., for some time now. But we recently received word that one of our major shipping routes has been targeted by pirates, and not the fun, rum-swilling Johnny Depp kind, but the evil, steal-our-stuff-and-terrorize-our-crew kind. Until the situation is rectified, we decide to increase our corporate insurance coverage. Just in case one of our cargo ships is targeted, we want to make sure our crew—and our clients’ merchandise—is extra double covered.
When companies opt to increase their insurance coverage above the liability limit, like Great Freight is doing, we’ll often end up paying a higher premium. That high premium is referred to as “manual excess.” Insurance is expensive, so companies try not to carry unnecessary levels of coverage all the time, but when the situation calls for it (we think evil pirates apply), we can temporarily take on greater coverage amounts.