Excess and Umbrella Coverage Is a Necessity, Not an Extravagance

// September 2, 2021
Reading Time: 3 minutes

Businesses buy insurance to protect themselves from financial losses due to claims or suits arising out of negligence that causes bodily injury or property damage. Sometimes, these losses exceed the limits afforded on a primary commercial general liability policy, creating the need for excess and umbrella insurance.

Some insurance purchasers may feel that an excess or umbrella policy is an unnecessary expenditure because they have a primary policy with $1 million each occurrence and $2 million general aggregate limits, and they believe these limits should be sufficient. However, a catastrophic loss or injury could quickly and aggressively exceed the primary limits. Consider the following claim examples:

  • A contractor accidentally installed a door incorrectly, causing a claimant to fall and sustain a permanent injury resulting in $3.5 million in damages.
  • An HVAC unit malfunctioned in an apartment building, starting a fire resulting in a tenant fatality. A jury awarded $4 million to the person’s family.

Contractors can quickly blow through their primary general liability limits. According to the Insurance Journal, “The construction industry is one segment of the economy that could emerge from the pandemic stronger.” However, “social inflation, nuclear judgments and third-party litigation financing … is making the umbrella market more difficult.”

It can be challenging for insurance agents to help customers understand why excess and umbrella coverage is important, but Amwins says one reason this policy is a necessity is the “normalization of nuclear verdicts. Across state courts, caps on punitive damages and damages for pain and suffering are being raised or eliminated entirely.”

In addition to protecting themselves from financial losses, insurance consumers, particularly contractors, purchase umbrella and excess coverage to satisfy contractual obligations and to comply with financial responsibility laws. USLI’s Excess and Umbrella product provides a quick and easy solution for obtaining up to $5 million excess primary limits. Some product highlights are:

  • Our Commercial Excess and Umbrella product is available over the majority of our eligible primary classifications
  • Attachment points begin at $500,000
  • Minimum premiums start at $400 per million dollar layer
  • Ability to write over any carrier rated B++ or better by A.M. Best
  • Ability to include commercial auto and employers liability coverages
  • Backed by the strength of an A++ rating and admitted in most states
  • Ability to write short-term policies to coincide with underlying effective dates
  • Ability to consider excess and umbrella coverage for contractor risks with up to $1 million in payroll and $2 million in sales

Please think of us for your excess and umbrella submissions by submitting online, over the phone or via email to your USLI underwriter.

As always, thank you for your support and business.

Contact Kristin Piersol,
Assistant Vice President, Underwriter | 888-523-5545 Ext. 2436

Elizabeth Shults headshotWritten by Elizabeth Shults
September 2, 2021