Buffer Layer
Categories: Metrics
The amount that is still not covered, despite a policy holder having multiple insurance policies.
Buffy runs a business slaying vampires which, obviously, comes with a lot of risks. To insure against these risks, Buffy buys an insurance policy for her inventory of wooden stakes, holy water, garlic, and crucifixes.
Buffy has about $10,000 worth of supplies, but her primary insurance company will only insure her for up to $5,000 worth of losses. To provide more protection, Buffy buys a secondary policy, but it only becomes activated if the losses incurred are at least $6,000. As such, Buffy the Vampire Slayer has a buffer layer of $1,000.
