Business | Umbrella or Excess Liability

Commercial Umbrella or Excess Liability Policy is designed to provide protection against catastrophic losses. It generally is written over various primary liability policies, such as the Business Auto Policy (BAP), Commercial General Liability (CGL) Policy, Business Owners Policy (BOP), Watercraft and Aircraft Liability Policies, and/or Employers Liability Coverage. The Umbrella/Excess Policies serves three purposes: it provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims; it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims; and it provides protection against some claims not covered by the underlying policies, subject to the assumption by the named insured of a self-insured retention (SIR).

Umbrella and Excess Liability policies are designed to provide coverage above the limits of underlying coverage.  The two policies are often mentioned interchangeably by insurance professionals; however, there is a difference between the policy forms.  The basic distinction between Umbrella and Excess Liability coverage is:

Umbrella policies are a type of excess liability that not only provides additional limits (as excess liability policies do) but also provides coverage not available in the underlying coverage.  When additional coverage is provided by the umbrella policy, it is usually subject to the insured’s assumption of a self‐insured retention or retained limit.

Excess Liability policies provide coverage above the limits of the underlying coverage.  It offers no broader protection than that provided by the underlying policy.  In fact, the excess liability coverage may even be more restrictive than the underlying coverage.

Most Umbrella and Excess Liability policies are not written on standardized forms, so it is always important to read your policies to see what they actually cover.  In actual practice, the line between Umbrella and Excess Liability is often blurred.  As previously alluded to, many Excess Liability policies are referred to as Umbrella policies.  Since coverage definitions are developed by individual carriers, Umbrella and Excess Liability policies may vary in what they actually cover.

Another thing to note is that most policies are written as a self‐contained policy; however, some are written on a follow‐form basis.  In follow‐form policies, the coverage is not defined and simply states that it applies only if the loss is covered by the underlying insurance.

In summary:
1. Umbrella policies provide additional limits over the underlying liability.  They usually provide broader coverage than an Excess Liability policy.
2. Excess Liability policies also provide additional limits over the underlying liability; however, they are more restrictive and do not provide coverage which is unavailable in the underlying policy.

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Spence-Chapin has had the pleasure of working with the wonderful John Petschauer, Inc. for 15+ years. They have always provided excellent service to us–with great knowledge, expertise, and patience — even in the most challenging situations. There has not been one time when they have not been immediately accessible to us, even at a moment’s notice. We thank them for their work and celebrate their 60th anniversary, while looking forward to working with them for another 60 years and beyond!
Spence-Chapin
My company has called on Petschauer Insurance for many years for its insurance needs: liability, liquor, auto, etc. Working with Erwin and his team has been a pleasure from beginning to present. They are quick to answer any question and provide sound advice. I have always felt that my and our needs are important to them, in theory and practice. They go the extra mile, and we continue to be well served.
Stephen Kennard from Canard Inc.
Petschauer is great. I never had a problem.  They always call me back. Fabulous employees who are always willing to help.
Marty Bruno
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John from Forest Pork Store Inc.
From the first time I spoke with Lori Halloran at Petschauer Insurance, I knew she was a special person. She is a woman that conducts herself professionally, with compassion and full knowledge of all types of insurance Petschauer has to offer. While speaking with her, as she explained and answered all of my questions, I felt like I was speaking with family…which is another way to describe this company. She has a way of making very confusing decisions so simple and easy to understand. I even added another insurance policy to my two renewal policies because of her. My last renewals could have been processed via mail but I really wanted to take the time to drive and meet this wonderful woman face to face. She greeted me with this huge beautiful smile, which matched her personality perfectly. So, I just had to go back another time just to say “Hi” and bring her flowers in appreciation for all her help and also celebrate a new friendship. The Petschauer “Family” has been there for me since my first policy when I was 19 years old, and now I’m a “senior”. I’ve been with them forever and don’t plan on going anywhere else. Thank you Lori for your dedication and to the rest of the Petschauer staff.
Jane Deitlein
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I have had the pleasure of working with various members of the Petschauer Team, both personally and professionally for 20+ years. And I couldn’t have done it without them. They go above and beyond. Heidi, Narima, Sherri and LuAnn don’t just bring to us the products they offer, they help me to understand the specifics and evaluate what makes the most sense for me, my family and my employees. I always feel I have a better understanding of an industry I have no understanding of so that I can evaluate the offerings in a smart way, cost effective way. They are proactive with renewals, allowing us the time to do our due diligence, evaluate our plans to be sure we’re properly covered and are always there to listen and help with special circumstances. Their kindness, caring and willingness to lend an ear when needed, really makes them stand apart from the rest. Heidi and her family have built a beautiful culture at Petschauer and I highly recommend them to anyone I meet.
Jamie Stedman-Novo
My family and I are long time personal and business clients of Petschauer Insurance. We sincerely appreciate your responsiveness and the quality of service that Petschauer provides. We have recommended your company to others because of our satisfaction with your service. We look forward to doing business with you for years to come.
Greg Weiss
I have worked with various individuals at Petschauer and have found each to be responsive, courteous, and thoughtful. Each year, the contact for my auto policy proactively seeks new bids and has consistently saved me money on my policy.
Ryan Huber
I have been with Petschauer Insurance for over twenty five years. The staff is knowledgeable and professional. Petschauer writes both my personal and commercial insurance and they provide excellent counseling. I truly trust the firm and their staff. Thank you.
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