Other Coverages and Options 3% Flashcards
How can the insured add coverage to a base policy?
Excess Liability Policies
Umbrella Policies
Coverage under Excess Liability comes into effect
only after limits of base policy are
reached.
Follow Form and Stand Alone Excess Liability policies rely on the base policy.
● Operate only after liability limit of base policy is exhausted
● Cover only what is also covered by base policy
Follow Form:
“follows” your base insurance
policy to the letter
● Uses all the same provisions, exclusions,
and coverages as the base policy
● Easier to underwrite and less expensive
than other Excess Liability policies
● Claims tend to be simpler
Stand Alone Excess Liability
Covers what base policy covers, but sets own exclusions and limitations to coverage
The adjuster must carefully review policy
provisions to ensure a loss is covered
Umbrella Policy: How It Works
May cover risk and exposures not included in the underlying policy.
Some coverages not included in the base policy that fall under the umbrella are
● Non owned aircraft
● Marine craft
● Property in insured’s custody
● Personal injury
● Pollution (limited)
● Professional liability
● Product recall
The Umbrella policy can operate in several ways:
● Can operate like Stand Alone
● Can also work as primary policy
● Provides broadest coverage
Self-Insured Retention (SIR):
● A type of deductible
● Equal to the limits on base policy
● But if limit of base policy is paid, this pays the SIR
Note: if a loss is not covered by base policy, insured must pay SIR out-of-pocket.
Excess Liability Policies
- follow form
- stand alone form
Inland Marine Insurance
● Covers property in transport (other than ocean transport)
● Covers property involved in transportation
● Policies typically known as “floaters
Inland Marine Insurance Eligible Property
● Movable
● In transit
● Instrumentalities of transportation or communication, including:
○ roads
○ bridges
○ tunnels
○ radio towers
○ power lines
Inland Marine Insurance NOT eligible
● Actual means of transport, such as:
○ trucks
○ airplanes
○ ships
○ forklifts
○ cranes
Controlled Line Floaters
● Written on a standard provision form promulgated by a bureau and filed with
the Department of Insurance for uniform use (for example, the ISO standard
policy form)
● Disclose the rates being charged
● General property floaters: personal effects and personal property
● Specific property floaters: cameras, fine arts, golf equipment, jewelry and furs,
musical instruments, stamp and coin collections, and silverware
Uncontrolled Line Floaters
● Insurers use their own forms, which can vary by company and by the individual
risk
● Used to meet the needs of individual clients
● Not filed with the state department of insurance
● Common floaters: outboard motor boat floaters, gun floaters, sporting
equipment floaters and wedding present floaters
Note: Floaters are often added as scheduled property endorsements to Homeowners policies, but can be written as stand-alone Inland Marine policies.
