EXCESS AND UMBRELLA INSURANCE
Have you ever wondered how you can protect your business from circumstances and risks that aren’t covered in your existing insurance policies? We’re happy to tell you that there’s, in fact, a way! Excess or umbrella insurance are the answer. these policies provide tremendous protection for your business, since they protect your company from limits or gaps in your underlying policies.
ARE EXCESS AND UMBRELLA INSURANCE POLICIES THE SAME?
EXCESS INSURANCE POLICY
Even though both policies are quite similar, and they are often used
interchangeably, the truth is, there is a main difference at the ir core and
to understand it, we should take a look at each policy separately.
Essentially, an Excess Insurance Policy, extends the limit of your
Insurance Coverage, therefore increasing its level of protection. It is
specific, meaning that it is Excess Coverage over a specific line (General
Liability, Auto Liability or Employer’s Liability).
You can add this coverage to one or more policies in order to boost their
limits of liability, and you can add it without worrying about meeting
UMBRELLA INSURANCE POLICIES
Umbrella Insurance Policies, on the other hand, are collective,
meaning that they could be over all three lines of coverage, as well as
provide protection on policies where the underlying coverage does not
exist. In the latter case, a deductible would apply in order to have the
Umbrella Policy applied.
As opposed to the Excess Coverage, whenever you plan to get an
Umbrella Insurance Policy, you need to meet certain requirements, such
us getting your insurance company underwriting the policy to prove
substantial financial strength to cover the limits of this insurance policy.
HOW DOES THE EXCESS OR UMBRELLA INSURANCE WORK?
Simply put, by filling the holes and extending the coverage on o ther
liability policies. It provides protection against exceptional events and
huge losses which are not likely to occur, but if they did, they would
cause irreversible financial damage to your business.
WHAT DO THESE POLICIES COVER?
In short, they cover the same liabilities as other policies, however, as
we’ve mentioned before, the Umbrella or Excess Insurance Policies go
beyond the limits of those other policies, hence providing greater
protection. Here are some of the benefits you get:
Protection against property damage: It even provides coverage in case
your standard policy is exhausted.
In case of bodily injuries, you can use this policy to extend the limits of
your health insurance and cover the cost of medical care and recovery.
It’s of great help if you’re facing copyright infringement or advertising
injuries, since it provides coverage for libel or slanderous lawsuits.