This is an insurance policy that is in excess of specified other policies. When the policy limits of the underlying policy have been met that is when the umbrella policy takes over. It will pay up to the umbrella policy limits. It can also protect a business from gaps in existing coverage, sometimes even exclusions on the primary liability policy.
Very often you will be asked to provide higher general liability limits. This can be achieved by purchasing an Umbrella policy. The auto policy and employer’s liability policies can also be underlying policies.
If you have a general liability policy with a $1,000,000 limit and you have a claim with an award of $1,500,000, the general liability policy will pay out the $1,000,000 and the umbrella policy will pay out the $500,000
No. It is only added protection for your general liability, employer’s liability and commercial auto.