Excess Liability Coverage: Not All Policies Are the Same

The insurance industry provides primary and excess liability for the water treatment industry. A primary policy is one that provides first dollar coverage for loss due to pollution, errors and omissions or general liability including completed operations. Our excess liability policy provides all three coverages in one policy, and may also include a deductible.

An excess policy provides additional limits of coverage above the primary policy. The excess may cover pollution only or general liability only. It may or may not provide excess coverage over your errors and omissions/professional liability.

Excess vs. Umbrella Coverage

This is a common mistake. Excess is not umbrella coverage. An umbrella policy provides coverage over multiple policies, while an excess may or may not. An umbrella also includes a Self-Insured retention or “drop down” coverage that provides coverage for loss not covered by any underlying policy. An excess is also following form, which means it incorporates all the coverages and exclusions contained in the underlying policy. It may then add a few exclusions.

Under our program we offer excess on pollution-only basis  but can offer excess on the commercial casualty and errors and omissions on one other combined excess policy.

Excess Amounts

Excess is normally sold in units of $1,000,000. If you buy $2 million, it is referred to as two times of your primary. Our underlying policy has $1,000,000 to $3,000,000 limits that is $1,000,000 per occurrence and $3,000,000 aggregate all occurrences. When you purchase two times the available insurance limits for a covered claim or suit for damages becomes $3,000,000 per occurrence and $5,000,000 aggregate all occurrences. A 5x purchase arises the coverage to $6,000,000 per occurrence and $9,000,000 aggregate all occurrences.

Some insureds are required to carry separate aggregates per project. The excess then increases the aggregate at each project. For instance a project requires a 1/2 limit. Buying two times increases the total limit to $3,000,000 to $4,000,000 per project. The total policy limit is $1,000,000 to $3,000,000 which is increased to $3,000,000 to $5,000,000 by the two times purchase. If enough events happen during the policy term at the project location, the aggregate may be exhausted but the insurance policy still retains $1,000,000 in aggregate and $1,000,000 in per occurrence for everything else. You have no coverage remaining at the project site at that point.

Our Policy

Our approach is to offer two different excess policies. One is to cover excess of the pollution only policy and the other is to provide excess over the errors and omissions and the commercial casualty limits including completed operations.

Excess can also be extended to provide coverage for automobile and employers liability if you decide to purchase this and pay the additional premium. Keep in mind every excess policy may vary in the coverages provided. You have to check and determine what it includes and does not include. As your proven choice we make certain your excess policies provide the coverage intended and needed for you.

About Watercolor Management

WaterColor Management has insured the water industry for over 30 years.  Our policies include unlimited defense cost coverage in the event of a lawsuit against you. Call us at (256) 260-0412 or email info@watercolormanagement.com for a quick quote for your Water Business Professional, Products/Completed operations, Pollution and General Liability Insurance.