LIABILITY INSURANCE (Excess)
is an excess liability policy introduced in the United States
in 1947 by Lloyd’s of London. Today, numerous American
insurers have their own version of the policy. The contract
is designed to: (1) provide high excess limits of liability
coverage for the business firm, and (2) fill any gaps of liability
coverage, over an amount of self-retention to be borne by the
insured. Policy vary but $10,000 or $25,000 are typical amounts
which the insured would have to pay himself in the case of liability
from an uninsured peril. If the claim exceeded the retention,
the umbrella insurer would then pay up to the policy limits.
excess or policy limits are usually quite large, ranging from
one million dollars up. The insurer requires that the insured
carry a full Comprehensive General Liability Policy with relatively
high limits. These required limits are typically $100,000
or $300,000. In case of loss, the basic contract will pay
first and when it is exhausted, the umbrella will pay the
next million or up to its particular limits. The reasons for
this requirement are that the umbrella insurer has the benefits
of the basic insurer’s underwriting and loss prevention
the benefits you get, umbrella policies are the best buy in
insurance today. These relatively cheap policies raise your
liability coverage to a million dollars or more, and are available
as additions to your auto or homeowners policies. Liability
insurance protects you from paying a high legal award that
might be assessed against you by a jury. For example, if you
have injured someone in an auto accident and you are found
negligent in a court of law, the jury could award a judgement
against you of hundreds of thousands of dollars. Liability
insurance makes that payment the insurance company’s
that you have auto insurance of 100/300/50, which is quite
common today. That means that if you are sued and must pay
as the result of an auto accident, the insurance company will
only pay up to $300,000 for bodily injuries to two or more
people. However, with juries routinely awarding much more
than that to accident victims, many people - especially those
with a higher coverages to insulate them from the possibility
of a high jury award.
umbrella policy does just that. For an additional $100 or
so annually, you can be protected up to $1,000,000 or more
for liability. There are umbrella policies available that
offer protection up to $5,000,000 for those who really think
they need it.
you buy umbrella coverage, most companies require that you
have either $100,000 worth of liability coverage on your home
or $300,000 worth of liability protection on your car. In
most situations, $100 or so will buy you $1,000,000 worth
umbrella policy increases your liability coverage. It is not
necessary to buy an umbrella that covers auto liability and
another that covers your homeowners. It’s all combined
in one policy.
though you can probably buy an umbrella policy from either
your auto or homeowner’s insurer at a discount, you
may get even a better deal elsewhere on an umbrella. Shop
around for the best umbrella coverage you can find.
policies then, provide a cushion against large negligence
awards that could wipe you out financially. The same company
that sells you your homeowners or auto policy will probably
also offer umbrella coverage. If you purchase your auto and
homeowners policies from the same company, you may be able
to buy an umbrella policy that will cover both at a discount.
note that the precise coverage afforded is subject to the
terms, conditions, and exclusions of the policy as issued.
This explanation is intended only as a guideline. This information
is not intended to be considered investment, tax or legal
advice. It is provided, for your education only. This is not
an insurance contract. All terms and coverages are defined
solely by your policy.
more details, please call a PaulBalep representative toll-free
1-800-964-8614 to receive a free, no-obligation quote. Like
so many satisfied clients, we think you’ll be happy
you did. And to set up a meeting to discuss additional insurance
and financial goals: Visit us online at www.paulbalep.com,
or e-mail us at firstname.lastname@example.org.
pays to shop around with PaulBalep. Your one stop shop
for insurance and financial services”
is number one>>. We are nonexclusive
producers who represent an average of eight companies-not
just one. PaulBalep can evaluate and compare the products
of several fine companies to find you the right combination
of coverage and value.