Excess Liability Policies Flashcards
What are the three purposes of excess/umbrella policies?
- To provide additional limits that are excess over those provided in the underlying insurance policies.
- To respond to losses when the aggregate limit of an underlying policy is reduced or exhausted.
- To provide primary coverage if there is no underlying coverage (subject to an SIR).
What are the three types of excess policies?
- Follow Form excess liability policy
- Stand alone excess liability policy
- Commercial umbrella liability policy
What is a follow form excess policy?
Mirrors the terms and conditions of the underlying coverage form or forms
What is a stand alone excess liability policy?
A policy that has its own, separate terms and conditions than the underlying. May not always provide coverage over the same terms as the underlying, but also can provide coverage where the underlying does not (but does not come down to cover first dollar).
What is a commercial umbrella policy?
Covers everything that the underlying covers, but also can provide broader coverages that can drop down and become primary for some covered losses.
What is a self-insured retention and when does it apply?
The amount an insured is responsible for when an umbrella provides primary coverage. This does not apply when the umbrella is going over a loss covered by an underlying policy
What is concurrency in relation to an excess policy?
Just because an aggregate was exhausted prior to the excess being in place (with different effective dates), doesn’t mean the excess is responsible to fill in that aggregate if the losses were prior to the excess effective date
Explain the impact of lowering underlying limits on an excess during the excess policy term.
The excess doesn’t care how the lower amount is paid, it won’t cover until the full expected underlying limits are paid (creates a gap in coverage).
