Discussion of Special Coverage
"McGowan Silo Aggregates"
The aggregate limit of liability on our Umbrella applies separately over each underlying liability policy. This means that an insured could make a $15,000,000 Automobile Liability claim against our Umbrella policy one day, then a $15,000,000 General Liability claim against our Umbrella policy the next day, and, assuming both claims were valid and collectible, we would pay both claims. Most other Umbrellas in the market only provide a single aggregate which does not apply separately over each underlying policy (i.e.- once the policy limits have been paid out once, the policy is exhausted).
Defense Costs Outside the Limits
Any costs expended by our carrier to defend a claim against one of our insureds do not diminish the aggregates on that insured's Umbrella. This is not the case with most of our competitors' Umbrella programs. In their programs, defense costs do diminish the aggregates.
Property Manager Automatically Covered
Our Umbrella provides automatic coverage for the Property Manager; most Umbrellas do not.
No Shared Limits
Insureds in our program do not share limits, and are provided a limit that applies "per location". Claims by one insured in our program have no effect on any other insured in our program. This is because each of our insureds receives its own policy and policy number. In many Umbrella programs on the market, clients share limits. In these programs, hundreds of insureds share one limit of liability. An example might be useful:
Association A purchases a $10,000,000 shared-limit Umbrella policy from Nefarious Insurance Programs. Association B does the same. If Association A is sued for $10,000,000, and Nefarious Insurance pays the claim, the limits of the policy are exhausted. If Association B were sued the next day, it would not have any Umbrella coverage, because Association A exhausted the limits on the shared-limit Umbrella policy the day before.
Shared-limit programs are tantamount to gambling. We think they do insureds a tremendous disservice.
Shared-limit Umbrella programs can often be spotted by their requirement that all insureds in the program prorate coverage onto a Master Umbrella Policy (since there is only a single policy of insurance, all insureds on the policy must share a common expiration date: e.g.- 12/10/2004)( Not all programs with common expiration dates have shared limits).
In shared-limit Umbrella programs, insureds are really nothing more than Additional Named Insureds on a Master Umbrella Policy. Therefore, they have no rights of the First Named Insured (normally the First Named Insured is the wholesaler managing the program). They are not entitled to notice that the Master Umbrella Policy is cancelled for non-payment (e.g.- when the wholesaler which manages the program fails to pay the premiums due the carrier purposefully or otherwise). They are not entitled to notice that the aggregates of the Master Umbrella Policy have been exhausted by other insureds in the program. The list goes on…
No Common Expiration Date
We issue Umbrella policies in our program concurrently with each insured's underlying General Liability policy. In doing so, we assure that no "Impaired Aggregate" situations arise (i.e.- a gap in Umbrella coverage resulting from the non-concurrency of an insured's GL and Umbrella policies). Many of our competitors programs have a common expiration date (e.g.- 12/10/2004) which creates a potential "Impaired Aggregate" situation.
Claims-Made/Occurrence Form Hybridizing Endorsement
Our Umbrella policies contain a "Claims-Made/Occurrence Form Hybridizing Endorsement." This means that our Umbrellas respond on a Claims-Made basis over underlying policies written on a Claims-Made basis, and on an Occurrence basis over underlying policies written on an Occurrence basis.
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