A commercial umbrella provides liability coverage that supplements the limits of an insured's general liability, automobile liability, and employers liability policies. Umbrellas may also protect insureds from exclusions and gaps in their primary liability insurance. Covered causes of loss not normally included in primary policies are subject to a self-insured retention (SIR). The insured is responsible for paying any SIR that applies. SIR amounts of $10,000 or $25,000 are common. The umbrella policy coverage is triggered when the limits of the underlying insurance are exhausted. The umbrella may also respond to a claim not covered by an underlying policy, depending on the wording of the umbrella contract. Any such loss that qualifies for coverage under the umbrella policy is subject to the insured first paying any applicable SIR.
Additional coverage may also be afforded by an excess liability policy. Excess liability provides insurance limits in excess of underlying general liability, automobile liability, employers liability and/or other scheduled liability policies. This policy has no unique forms and is strictly a following form policy. The coverage available in the underlying policies is also available in the excess policy, and exclusions in the underlying policies are also exclusions in the excess policy.
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