Umbrella vs. Excess Liability Insurance Policies

What’s the difference between Umbrella and Excess Liability Insurance Policies?

Umbrella and Excess Liability policies are both designed to provide coverage above the limits of underlying coverage.

The two policies are often mentioned interchangeably by insurance professionals. However, there is a difference between the policy forms. The basic distinction between Umbrella vs. Excess Liability coverage is:

Umbrella Policies:

Umbrella policies are a type of excess liability that not only offers higher liability limits, but also broadens coverage for things that your underlying policy might not cover. For example, an umbrella policy could extend coverage territory to include worldwide coverage territory, which is often broader coverage territory than underlying policies cover.

When additional coverage is provided by the umbrella policy, it is usually subject to the insured’s assumption of a self‐insured retention, or retained limit.

Excess Liability Policies:

Excess Liability policies provide coverage above the limits of the underlying coverage.  It offers no broader protection than that provided by the underlying policy.  In fact, the excess liability coverage may even be more restrictive than the underlying coverage.

Most Umbrella and Excess Liability policies are not written on standardized forms, so it is always important to read your policies to see what they actually cover.  In actual practice, the line between Umbrella and Excess Liability is often blurred.  As previously alluded to, many Excess Liability policies are referred to as Umbrella policies.  Since coverage definitions are developed by individual carriers, Umbrella and Excess Liability policies may vary in what they actually cover.

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*We are currently not writing standalone umbrella policies. If you are interested in another type of policy (such as auto, homeowners, or general liability) AND an umbrella policy, please complete the form below.

Another thing to note is that most policies are written as a self‐contained policy, but some are written on a follow‐form basis.  In follow‐form policies, the coverage is not defined and simply stated that it applies only if the loss is covered by the underlying insurance.

In most cases, if you can purchase an umbrella policy go for it. However, if only an excess liability policy is available to you it is still better to have the additional coverage. It’s still the best value for the amount of additional coverage you will have.

In summary:
1. Umbrella policies provide additional limits over the underlying liability.  It usually provides broader coverage than an Excess Liability policy.
2. Excess Liability policies also provide additional limits over the underlying liability, but is more restrictive and does not provide coverage which is unavailable in the underlying policy.

Read Susan’s story about how a Commercial Umbrella Policy could have saved her business.

If you have any questions about the coverages discussed in this post, please contact our office and we will be happy to help you.


All statements and information communicated in this blog are subject to the terms, conditions, limitations and exclusions of each policy. 
Information Source: 2009 Infinity Schools Insurance & Security Training

2 Responses to “Umbrella vs. Excess Liability Insurance Policies”

  1. Brad Walters

    re Ohio Casulty what are the “drop down” coverages on their umbrella vs their excess gl What is their SIR on the drop down features

    thank u Brad Walterd