EXCESS LIABILITY VS. UMBRELLA LIABILITY POLICY

By Gaurav Chhokar

Updated on August 04, 2019

Both are liability policies and provide additional limits to underlaying policies. But have notable differences between these two. Let talk about them

1. Umbrella policy provide additional limits to underlying policy and increase the scope of coverage which is not covered under the underlying policy. Where in Excess liability Policy, it only increase the amount of coverage to underlying policy but not scope of coverage.

Example: If insured operates his business world wide and he has CGL policy and excess liability coverage and CGL policy has condition that it will only cover liability claim for USA. In this case excess liability policy will follow the same and not provide any claim which occurs outside USA territory. If insured have Umbrella policy, it will cover claim which is occured outside US  regardless weather it is covered under underlying policy or not.

2. Under drop down coverage in umbrella liability policy, first It provides coverage to claims for which the underlying policies do not provide any coverage regardless of aggregate limits. Second it provide coverage even if aggregate limits of underlying policy has been exhausted. In Excess liability policy, no drop down coverage facility available.

3. Excess liability policy may apply to one or more underlying policies wherein Umbrella liability policy almost provide additional coverage over several primary policies such as CGL, Auto liability, employer liability etc.

We hope that myth of "Excess and Umbrella coverage are same" has been eliminated completely from the mind of many people now. Please share and give your feedback in below comment section. It will give us opportunity to improve.