Insurance Defense and Coverage
Coverage Types
An umbrella policy sits above scheduled underlying coverage, responding once those limits are exhausted. Unlike a pure follow-form excess policy, an umbrella can also drop down to cover certain claims the underlying policies exclude, in which case the insured pays a retention first.
The umbrella's schedule of underlying insurance sets maintenance requirements, and failure to keep the required underlying coverage in place can leave a gap the umbrella does not fill.
Alternative Names:
Commercial Umbrella, Umbrella Coverage
Why it Matters?
Umbrella coverage is where serious-injury exposure actually lands, so notice to the umbrella carrier and its participation in evaluation should occur early rather than at mediation. Whether the umbrella is true umbrella or follow-form determines whether broader coverage exists than the primary provides, which can change the settlement calculus materially.
Frequently Confused with
Related terms
Frequently asked questions
What is the difference between umbrella and excess coverage?
What happens if required underlying insurance is not maintained?
