Companies that manufacture products, operate heavy machinery, and operate large warehouses take on larger risks than they might realize. Manufacturers may be held liable for a variety of bodily injury and property damage claims, as well as any medical or other expenses incurred by injured parties.
Even smaller companies like business startups or companies with few assets need more coverage, not less. This is where excess and umbrella can help.
When the underlying limits of a policy have been reached, excess or umbrella coverage can be applied. Both policies will protect a company from significant losses. Though often used interchangeably, they are not the same. Let’s look at how to differentiate the two:
Excess Liability Insurance provides coverage over and above an underlying liability policy or policies. If a claim exceeds the limits of a client’s primary policy, this policy would kick in. Excess liability coverage can sit over multiple underlying policies, such as auto, fleet, professional, and general liability. An excess liability policy does not require a self-insurance retention.
Over and above underlying coverage, umbrella liability insurance provides increased limits. Also, it can drop down if one of the underlying policies’ aggregate limits are exhausted, and in some cases, it can cover claims that aren’t covered by the underlying policies at all. Under an umbrella policy, more coverage can be provided than what is already covered by the underlying policy. Umbrella Liability requires a self-insurance retention of at least $10,000.
Excess and Umbrella Liability provides a way to customize insurance coverage for your clients based on the unique risks they face, whether they are store owners, office professionals, or wholesalers/manufacturers.
What’s At Risk
There is always the chance that something could go wrong, regardless of how thorough a company’s safety procedures are, and this risk is only exacerbated when employees are overworked or under extra pressure due to labour shortages. Following are some of the major exposures:
- Using large-scale machinery and equipment
- Handling finished products
- Litigation involving property damage and/or personal injury exceeding the limits of the client’s existing policy
- Medical and other expenses incurred because of bodily injury or property damage
- Litigation or product recall resulting from product defects or false advertising
- Possibility of releasing potentially hazardous materials into the environment while conducting operations
When Excess and an Umbrella are Necessary
Let’s say an executive loses not only wages but also pay due to medical bills and rehabilitative therapy as a result of a work-related accident. An excess and umbrella liability policy can cover the cost of legal defence if the company (the insured) is sued for third-party damages.
As another use case for excess and umbrella policies, a construction company may be asked to provide a higher limit for city or government contracts, such as road construction, sewer-line installation, and many more.
SWG CGL: Excess & Umbrella
SWG CGL – Commercial General Liability insurance is designed to protect the products or services of small and large businesses. As careful as you might be, there are unforeseen events that can happen to every business. Protect your hard work with a policy that fits your needs.
Whether you’re a store owner, office professional or wholesaler, commercial general liability insurance coverages can be customized to protect you against the unique risks and exposures you face.
SWG CGL – Commercial General Liability policy protects your business from financial loss should you be liable for property damage or personal and advertising injury caused by your services, business operations or your employees. It covers non-professional negligent acts for which you might become responsible
Umbrella Insurance is a type of excess insurance. It works almost the same way as Excess Liability Insurance, except an Umbrella policy can:
- Be applied to multiple underlying liability policies, such as General Liability policy, E&O Policy, Automobile Liability, and many more
- Drop down when an underlying policy’s aggregate limits are exhausted
- Cover claims not included in the underlying policies
- For an Umbrella policy to cover claims beyond those covered in the underlying policy, your client needs to pay a self-insured retention (SIR). An SIR is the amount of money your client pays before the insurance company responds to the loss. For instance, let’s say your client has an Umbrella policy with a $10,000 SIR, and they make a claim that costs $100,000. Your client must pay $10,000 toward the claim, and then the insurance company will pay the rest.
- Our policies include liability for insured contracts
- Cross liability
- Excess of Contingent employer’s liability
- Product Completed Operations coverage (Broad Form)
- Excess and Umbrella are follow form of underlying policy
- Our policies can offer excess of enhancement coverage to include, Faulty Workmanship, Product Recall coverage, Employee Benefit, Employer’s Comprehensive Bodily Injury Liability, Sub-limits for Errors & Omissions, as well as Manufacturer’s E&O and Employment Practices Liability.
- Limits up to $10,000,000 +
- Excess Policies do not have an SIR (Self-Insured Retention)
- Umbrella Policies have a standard SIR of $10,000 but can differ pending risk, revenues and area of sales.
- Coverage can be provided for sales into the U.S. and Worldwide; including U.S. with turnover limitations.
If you do not see what you are looking for, or have any queries, please contact one of our Liability Underwriters, who will be happy to discuss.
To learn more, visit our product page at https://swgins.com/product/excess-and-umbrella-liability.html
Content is current as of the date of broadcast and is subject to change without notice.