CIC Commercial Multiline Exam (with A+ Graded Solutions)

Identify and describe the three primary purposes of excess liability/umbrella policies (LO1) correct answers 1. Provide additional limits that are excess over underlying limits of insurance 2. Provide primary coverage when underlying poliy does not respond beacuse its aggregate limits of insruance are exhausted. 3. Provide broader coverage than the exsiting underlying insurance excess liability coverage forms and commercial umbrella liability policy correct answers 1. follow forms - hella short - "basically what underlying says but more money" - does NOT provide broader coverage 2. excess liability - own insuring agreement and stuff - could be the same, narrower, broader 3. commercial umbrella liability policy - own insuring agreement and stuff - broader coverage Define "Self-Insured Retention" (SIR) and apply it (LO2) correct answers SIR is the dolllar amount listed in the declarations paid by the named insured before the excess insurance becomes applicable Applies only when the excess policy provide broader insurance protection Does not apply when the umbrella drops down over exhausted limits or when exceee over underlying limits. SIR may be written per occurrence or policy period basis Explain the importance of concurrent dates and be able to provide solutions for non-concurrency situations (LO3) correct answers Concurrent dates means the policy period of the excess/umbrella policy are the same as those of the underlying insurance policies The declarations of the excess liability has a schedule of underlying insurance that indicates the required limits that are to be in effect at its effective date. The underlying limits must be unimpaired at the effective debate of the excess liability Describe the underlying insurance requirements of excess liability/commercial umbrella policies and apply the in a practical applications. (LO4)*** correct answers Coverage Most insures typically require CGL, Business Auto and Employer Liability Other liability policies may be required for other known exposure such as aircraft, Iiquor liability, watercraft