Excess, Umbrella & Bumbershoot Policies
These types of policies are generally written to provide coverage above the limits of primary liability policies or in some instances, to drop down and provide certain coverages when the underlying primary does not afford the required protection. These policies are underwritten with the intent of providing protection in the event of a catastrophic loss event.
Excess policies generally serve to provide the insured with additional limits of liability coverage after the exhaustion of one or more scheduled primary policies. Excess insurance typically follows the same terms (follows form) as the coverage provided by the primary policy.
Umbrella liability insurance differs from straight excess insurance in that it often provides broader coverage than a typical excess policy and will drop down above a certain self insured retention (SIR) to provide coverage where the primary policy does not. An SIR differs from a standard deductible in that the coverage afforded stacks above the SIR and the insured is typically liable to pay the damage and expenses up to the full amount of the SIR before the policy limits kick in. Contrast that with a deductible, which is usually taken off the total amount of damage and expense at the conclusion of the case and reimbursed to the insurance company.
Bumbershoot policies are umbrella policies issued to insure wet marine exposures. They operate much like umbrella policies in that they often will provide broader coverage than the underlying primary liability policy.
In the course of our 25 years of experience we have handled hundreds of cases that involve the interplay between primary and excess insurance. Our understanding of the rights and obligations between primary and excess insurers provides us with the information necessary to maximize the recoveries afforded under both policies.