What are Umbrella Liability & Excess Liability Insurance Policies?
Think of Umbrella Liability Insurance as a "safety net" when the following policies have exceeded their limits:
- General Liability Insurance.
- Commercial Auto / Hired and Non-Owned Auto Insurance.
- Employers' Liability Insurance.
Though your client pays a single premium for Umbrella Liability, it can be applied to all three policies. When an underlying policy's limits have been reached, your client can make a claim on their Umbrella Insurance to cover the additional amount owed.
For instance, if your client has a General Liability policy limit of $1,000,000, but is found liable for $1,650,000 in damages, they would have to come up with the difference on their own. However, if they invested in Umbrella coverage, this policy can cover the extra $650,000.
Excess Liability works much the same way as an Umbrella policy. It pays the remaining balance when one of those three policies listed above comes up short. The difference is that Excess Liability can only be applied to one underlying policy.
One more important note: neither Umbrella nor Excess Liability can be used toward your client's Errors and Omissions (E&O) or Professional Liability Insurance.
Lastly, both Umbrella and Excess Liability coverage can be purchased in increments of $1 million. Contact an Insurance Noodle agent for assistance in figuring out which policy fits your client's needs.