What type of risks would typically require excess liability coverage?

Excess liability coverage is designed to protect against large claims that exceed the limits of standard insurance policies. This type of coverage is particularly important for high-risk activities where the potential for significant financial loss, due to liability claims, is elevated. Examples of these high-risk scenarios include businesses that engage in activities such as construction, manufacturing, or any operations that involve the potential for bodily injury or property damage to others.

In contrast, low-risk operations and standard personal property risks do not typically generate the level of liability exposure that necessitates excess coverage. Similarly, moderate-risk home-based businesses generally have lower potential claims than high-risk activities, reducing the need for extensive liability insurance. Therefore, the necessity for excess liability coverage is most pronounced with high-risk activities that involve substantial liability exposure, making this the correct answer.