Purpose of Excess Liability/Commercial Umbrella Policies - ANS1. Provides additional limits
that are excess over underlying limits of insurance
2. Provides primary coverage when an underlying policy does not respond because its
aggregate limits of insurance are exhausted
3. Provides broader coverage than the existing underlying insurance.
Excess Liability Coverage Forms - ANS1. Follow form excess liability policy characteristics
- Same terms and conditions as the underlying policy
- Provides additional limits excess over underlying insurance
2. Excess liability policy characteristics
- Has its own insuring agreement, terms and conditions
- Provides additional limits excess over underlying insurance
3. Commercial Umbrella Liability Policy
- Has its own insuring agreement, terms and conditions
- Provides additional limits of liability excess over underlying insurance
- Affords broader coverage for exposures not covered by underlying policies
- Subject to the Self‐Insured Retention (SIR)
Self‐Insured Retention (SIR) - ANSSIR is the dollar amount listed in the Declarations paid by
the named insured before the insurance of the Commercial Umbrella Liability Policy
becomes applicable.
The SIR applies only when a Commercial Umbrella Policy provides broader insurance
protection on claims not covered by a required underlying insurance policy
HOWEVER,
The SIR does not apply when a Commercial Umbrella drops down over exhausted limits or
when it is excess over underlying limits
The Need For Concurrency - ANSThe underlying limits should not have been reduced or
exhausted by BI or PD occurrences that occurred prior to the effective date or by P&A Injury
offenses committed prior to the effective date of the Excess Liability/Commercial Umbrella
Policy.
Policies with nonconcurrent dates could have occurred for various reasons, such as:
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