Erschienen in Ausgabe 1-2016Märkte & Vertrieb

267. Umbrella insurance

Von Keith PurvisVersicherungswirtschaft

Lesen Sie den vollständigen Artikel

Erhalten Sie Zugang zu allen Artikeln unserer Fachzeitschriften und Publikationen.

267. Umbrella insurance

Umbrella policies are used in the liability classes, most commonly for commercial general liability [CGL], which covers third party loss due to bodily injury and property damage [mainly public and product liability], but not pure financial loss. The umbrella provides cover in excess of the CGL policy, which is often called the primary policy in this context. In addition to providing higher cover limits for public and product liability insurance, when one or both of their limits have been exceeded, it may also cover eventualities that are excluded in the conditions of the primary CGL policy. In such cases the umbrella coverage does not sit on top of the primary layer, but “drops down” to provide cover from the ground up.
Although at first sight umbrella insurance is conceptually similar to Difference in Conditions/Difference in Limits [DIC/DIL] arrangements, there are several essential differences. Umbrella insurance is used by a corporate client to increase and possibly widen its insurance cover. The cover is provided by a separate policy, frequently from a different insurer, which will, however, need to know the wording of the underlying CGL policy. DIC/DIL, in contrast, is an arrangement made in the context of an international insurance programme, being a special agreement between two related policies. It takes the form of a clause or clauses in a master policy that stipulate[s] when and to what extent policy limits or sub-limits can be raised and/or conditions widened in local policies in various national markets. DIC/DIL thus has a control function that is completely absent from umbrella policies and is, furthermore, not confined to the liability class, but is also used for property insurance.
In European markets umbrella insurance is mainly used for corporate clients, and then more often to increase the sum insured beyond the primary cover than to broaden policy conditions. In the United States, however, there is a lively market for the sale of umbrella policies to private persons. In the US motor market, for example, the main purpose of umbrella insurance is to provide excess cover on top of underlying policies, whose sums insured are often low, leaving policyholders exposed to high claims. In the household insurance market, however, the most important role for umbrella policies is to provide cover for eventualities usually excluded in the primary policy, such as being sued for libel or for bodily injury or property damage to…