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Umbrella Liability Policy
A policy designed to provide protection against catastrophic loses. It generally is written over various primary liability policies, such as the business auto policy, commercial general liability policy, watercraft and aircraft liability policies, and employers' liability coverage. The umbrella policy 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 claim; and it provided protection against some claims not covered by the underlying policy, subject to the assumption, by the named insured, of a self-insured retention.
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