Which type of insurance applies only after the primary coverage limits have been exhausted?

The type of insurance that applies only after the primary coverage limits have been exhausted is excess insurance. This form of insurance is designed to provide additional coverage beyond the limits of a primary policy. For example, if an individual has a primary liability policy with a limit of $1 million, and a claim results in damages of $1.5 million, the excess insurance would cover the amount above the $1 million limit, up to its own limit.

Excess insurance is particularly important in situations where the potential for high damages exists, as it offers an extra safety net against large claims. It operates in conjunction with the primary insurance policy, kicking in only after the primary limits have been fully utilized, thereby ensuring that the insured has an added layer of financial protection.

The other options, while relevant to various aspects of insurance and risk management, do not fit the specified criteria of providing coverage after primary limits are exhausted.