What is the purpose of increased value and excess liability (IVEL) clauses?

Increased value and excess liability (IVEL) clauses serve the essential function of providing additional coverage above and beyond what is offered by the underlying policy. This means that in the event of a loss that exceeds the limits of the primary insurance, the IVEL clause activates to cover the excess portion. This is particularly important in scenarios where the primary policy may not adequately cover the total cost of a loss, ensuring that the insured has sufficient protection against significant liabilities or damages.

This type of coverage is crucial for individuals or businesses that undertake high-risk activities or have substantial assets at stake. By having an IVEL clause in place, insured parties can manage their risk more effectively, as they can have peace of mind knowing they have an additional layer of security should their primary insurance limits be reached. Such clauses enhance the overall insurance protection strategy, especially in areas where the potential for loss may exceed initial expectations.