umbrella insurance policy

An umbrella insurance policy is purchased when a business wants to increase liability limits for General Liability (GL) and Automobile Liability.  An umbrella can extend other miscellaneous liability limits as well but the primary usage is for these liability exposures. 

Umbrella coverage can be a “true umbrella” or “following form”.  Following form means that the coverage ONLY extends above policies listed in the umbrella policy.  Most often a following form policy is used to increase GL limits only.  A true umbrella is more broad and has the potential to expand limits in areas not generally considered.

Premiums are a function of the underlying coverage.  The first million of coverage is the most expensive and typically about 30% of the primary GL policy.  Each succeeding million is less than the previous million of coverage.

IMPORTANT:  Umbrellas do not typically extend above the following:  Professional/Errors & Omissions policies, Directors and Officers Liability policies, Fiduciary Liability Policies or Employee Practices Liability insurance policies.