What is typically the first policy to respond in a layered insurance program?

In a layered insurance program, the primary policy is designed to be the first line of defense, meaning it is the initial policy that responds to a loss. This policy covers losses up to a specified limit before any excess or additional coverage kicks in.

The primary policy is crucial as it sets the foundation for risk coverage in layered arrangements, which often include multiple insurance layers to provide broader financial protection against higher risks. In situations where losses exceed the limits of the primary policy, excess policies or subsequent layers would then provide additional coverage.

Overall, understanding the role of the primary policy is essential for managing risk effectively, especially in complex insurance structures where multiple policies are utilized to address varying levels of exposure.