1. Excess and Umbrella Liability Policies
Primary policies (CGL, Auto, Homeowners)
provide first layer of protection
Excess liability policy
provides coverage above limits of primary policies
Umbrella policy
provides additional limits (as excess does) and may also provide additional coverage over self-insured retention

2. Why Is This Coverage Needed?
Problems determining Maximum Possible Loss
Layering of liability coverage
Primary insurer unwilling to provide high limits
Effect of aggregate limits

3. Coverage Formats Free-Standing Umbrella Forms Self-contained policy
Excess Liability Forms
Following Forms
Generally same provisions as underlying policy
Combination
Coverage A - Following form
Coverage B - Umbrella
Specific excess
Losses from single occurrence must exceed level
Aggregate excess
Losses during a specified period of time must exceed level

4. Umbrella Liability Insurance
Provides additional limits above each occurrence
Covers unusual losses not covered by primary insurance
Provides additional coverage when aggregate limits are exhausted
Provides additional coverage over self-insured retention

5. Nature of Commercial Excess Liability Insurance
Higher limits
Gap of buffer layer coverage
Layers of coverage

6. Possible Problem Areas
Concurrency
Policy terms must be the same
Defense costs
May be included in primary policy but treated differently by excess/umbrella
Exclusions may differ
Pollution
Punitive damages
Coverage triggers may differ
Tail coverage
Adequacy of limits

7. Examples: Construction Company has the following policies:
CGL Policy
Each occurrence limit $1,000,000
General aggregate limit $2,000,000
Prod-comp. op. aggregate limit $2,000,000
Umbrella Policy
Each occurrence limit $5,000,000
Aggregate limit $10,000,000
Self-insured retention $25,000

8. Loss 1:. Company held liable for $1,800,000 for
Loss 1: Company held liable for $1,800,000 for property damage at a worksite CGL pays $1,000,000 Umbrella pays $800,000 Loss 2: Company held liable for $300,000 for bodily injury to customer at main office CGL pays $300,000 Loss 3: Company held liable for $1,300,000 for bodily injury to passerby at a worksite CGL pays $700,000 Umbrella pays $600,000 Loss 4: Company held liable for $300,000 for bodily injury suffered by a client on a 30 foot boat when boat collides with a pier CGL pays 0 (watercraft exclusion) Umbrella pays $275,000