The Commercial Excess Squeeze: Structuring Middle-Market Layers

Structuring middle-market excess liability is an exercise in matching confirmed carrier appetite to precise attachment points. Each proposed layer requires a market willing and authorized to assume severity at that retention level. Available limits must be established for the individual account, not inferred from a headline.

Attachment Point Discipline

The integrity of an excess tower depends on clean attachment:

Primary attachment — the first excess layer attaches immediately above the scheduled primary limit.

Following-form vs. specific — following-form excess mirrors the primary; specific excess covers defined exposures the primary excludes.

Gap risk — any misalignment between layers creates uninsured exposure that often goes undetected until a claim.

Lead-Layer Pricing Dynamics

Lead layers carry the highest frequency of breach and therefore command the most rigorous underwriting:

Lead carriers price to attachment, not limit — the cost per million rises sharply at lower layers.

Follow layers are priced to severity, with lower frequency but higher conditional loss.

Capacity aggregation rules limit a single carrier's stacked participation across multiple layers.

Carrier Risk Appetite Mapping

Not every A-rated carrier writes every layer. Effective placement maps appetite by:

Line size tolerance — the maximum single-layer capacity a carrier will hold.

Construction vs. casualty — some carriers lead on casualty follow but decline construction primary.

Vertical vs. horizontal participation — carriers willing to stack vertically versus spread horizontally.

The Takeaway

Coordinating selected excess layers requires human underwriting judgment: review attachment points, lead-layer pricing and continuity of coverage against participating carriers' appetite and authorized terms. StrataCover's Charter 1 target profile is middle-market primary casualty and selected excess or umbrella layers, including programs seeking $10M–$25M total liability limits or participation layers within larger programs. This is not a capacity promise or a liability-limit cap. Charter 1 E&S portal intake is $20,000–$350,000 gross written premium; premium and liability limits are different measures. Actual offers remain subject to carrier underwriting and authority.

Key Takeaways

Attachment Point Discipline

Lead-Layer Pricing Dynamics

Carrier Risk Appetite Mapping

The Takeaway