Excess of loss cover

A form of reinsurance under which recoveries are available when a given loss exceeds the cedant's retention defined in the agreement. Usually there is an upper limit. The excess point and upper limit may be fixed or indexed as specified in a stability clause. Usually this type of reinsurance relates to individual losses, but it can be a form of aggregate excess of loss reinsurance covering the total of all losses in a period and subject to a total aggregate claim limit.