Umbrella/Excess Coverage
Why does a company need Umbrella/Excess
Coverage
Umbrella and Excess Coverage provides an extra fixed dollar amount of coverage that would extend over an existing policy, should the existing policy’s limits be exhausted. If your company needs more coverage beyond the scope of an existing policy, an Umbrella or Excess policy would provide the means to do so.
Consider a contract, such as a lease, that requires you to have a certain level of General Liability coverage, perhaps $5mm. Many lease requirements will stipulate that a company has a level of coverage that surpasses the levels that a standard CGL will offer, typical CGL policies will offer $1mm or $2mm per occurrence. An Umbrella or Excess coverage will add an excess layer of coverage that would go ‘on top of’ the primary policy in order to satisfy such a requirement.
What does General Liability cover?
Excess coverage provides a straightforward extra dollar amount of coverage that goes over an existing policy. An excess policy will follow the provisions of the underlying insurance policy that it is ‘going over’, providing extra coverage in the event that the underlying policy limits are exhausted.
Umbrella coverage also provides extra coverage over an underlying insurance policy in the event that such underlying policy limits are exhausted. Umbrella coverage differs from Excess coverage in that an Umbrella can extend over multiple different policies as well as broaden the scope of coverage.
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