Policy limits
There is no standard limit of liability for an umbrella liability policy. The face amount of coverage can range from as little as $1 million to more than $100 million. The amount should reflect the policyholder's perceived vulnerability to catastrophic risk.
High-limit coverage sometimes involves several companies, each underwriting a layer of risk. One insurer may write the first $20 million over primary; another company the next $30 million (over primary plus $20 million), and so on.
Or several insurers may participate in quota share, each assuming a percentage of the total risk of a block of catastrophic coverage.
Significant exclusions
Most of the exclusions in a standard umbrella liability policy parallel those in a commercial general liability policy. The typical umbrella liability policy also excludes:
- Any obligation imposed by the Employees' Retirement Income Security Act of 1974 (ERISA) or its amendments.
- Any obligation of the insured under a no-fault, uninsured motorist or underinsured motorist law.
Note that in a Following Form umbrella liability policy, exclusions are the same as any found in an underlying liability policy.
Typical umbrella offerings exclude coverage for acts of sexual misconduct and claims against directors, officers and trustees.
The national program for Episcopal parishes written through Church Insurance offers additional limits of $1 million of sexual misconduct protection. In addition, it provides coverage for directors, officers and members of the vestry up to the policy limits chosen.
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