EXCESS LIABILITY INSURANCE
Excess liability insurance (GL) is coverage that increases the limits of your General Liability/Professional Liability policy. An excess policy sits over your primary policy and provides the same coverage as the primary. If you have a claim in which you exhaust your underlying limits of insurance, your excess policy will pick up where it left off.
UMBRELLA LIABILITY INSURANCE
Umbrella liability insurance is very similar to Excess Liability insured. The difference is that an Umbrella insurance policy sits over more than one line of coverage. Under the SARRG program, the Umbrella policy sits over your General Liability/Professional Liability, Commercial Auto Coverage and Worker’s Compensation Coverage.
Who needs Excess or Umbrella Liability Coverage?
There are two main drivers that you should evaluate when determining if Excess or Umbrella liability coverage is a fit for your business.
- Do your contracts require you to carry higher limits? Many contracts will require a 1M Umbrella or Excess coverage.
- Who are your clients/what is the value of the buildings you are working on? Evaluating the potential value of claims is extremely important in determining the level of coverage you need. If you are working on commercial properties with higher values, you may want to consider increased limits so you aren’t taking on that exposure uninsured.
While these two points are the main items to evaluate when determining the amount of coverage you need, it is always recommended that you carry as much coverage as you can to avoid the unexpected.
Excess and Umbrella Liability insurance cost
In excess coverage, the main determining factor is the cost of your underlying insurance. The characteristics of your business are taken into consideration when evaluating your primary insurance and those rates are carried over to affect your excess rate.
Umbrella coverage is very similar in that the cost of your underlying insurance is the main factor, however, as the policy is broader and sits over more lines of coverage, those exposures are taken into consideration. For example, we charge a rate per commercial auto insured on your underlying auto policy.
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Do I need both Excess Liability and Umbrella Liability?
In short, no. It goes back to what your contracts require and you individual exposures that determines which policies fit best for you. Contracts will sometimes outline both policies, but this is generally negotiable as there is overlap in coverage. SARRG can help you determine which policy fits best and help you in working with you clients on ensuring the contracts outline what make sense for your scenario.