Excess and Umbrella Policies
These policies provide coverage in excess of some primary underlying coverage, such as home, auto, boating, commercial, etc. "Excess" generally refers to a coverage over a specific underlying policy, while "umbrella" generally refers to a more comprehensive policy that provides an extra layer of liability insurance over any number of underlying policies. Candidly, they generally provide the same type of insurance protection, and the terms are commonly used interchangeably.
No business or individual should be without some form of umbrella or excess insurance. Generally, the additional cost is relatively nominal, and by having such a policy the costs of the underlying insurance generally goes down.
Payments under these policies are made when the underlying policies' liability limits are "exhausted" as that term is defined in the policy. And, exhaustion by unreasonable settlements may lead to actions against the insurer(s).
There may also be more than one such policy, or layers of such policies, and a failure to maintain an middle layer of coverage may void the coverage afforded by higher layers.
As with all other types of insurance policies, these, too, are fraught with complicated and convoluted issues.
If you have a question, or a problem, concerning your umbrella or any other type of policy, call us or contact us online immediately.