Morris Company self-insures its workers compensation loss exposure. Th

Morris Company self-insures its workers compensation loss exposure. The risk manager of Morris Company is concerned about the possible impact of a single catastrophic claim.

She decided to set a retention limit of $500,000 per-claim, and to purchase insurance that will be begin to pay once Morris Company has paid $500,000 on a single claim. The insurance the risk manager purchased is called
A) captive insurance.
B) excess insurance.
C) primary insurance.
D) umbrella insurance.

ANSWER

Answer: B