excess-of-loss treaty
reinsurance
Quick Summary
Excess-loss reinsurance is a type of reinsurance where a company agrees to cover losses that exceed a predetermined amount, often with a maximum limit. This means the reinsurer only becomes liable for the portion of a loss that surpasses a specified sum. In essence, it's a way for an insurance company to transfer the risk of large, unexpected claims to another insurer. This contrasts with other forms of insurance where liability might begin from the first dollar of a loss.123
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