. Purpose of Excess Liability Policies  To provide high limits of liability over primary coverage.  May provide broader coverage for losses not covered by underlying policies.  May “drop down” and become primary when underlying policy aggregate is exhausted.

. Types Of Excess Liability Policies

. Excess Liability  The excess carrier effectively writes its own version of the coverage provided.  There may be areas where the coverage is narrower than the primary.  A duty to defend is often not included in this type of policy.

. Follow Form Excess Liability  A true follow form policy mirrors exactly the underlying policies.  Very limited market today for this type of policy.  Today the term often indicates that the excess carrier is using the primary policy(ies) as a starting point.

. Follow Form Excess Liability  Always obtain a copy of the policy form being used by the quoting insurance company.  Never use the term “follow form excess” unless it absolutely follows the underlying policy(ies) terms and conditions exactly.

. Typical Following Form Language:  “Except to the extent the insuring agreements, terms, definitions, conditions and exclusions of this policy differ, the coverage provided by this policy shall follow the insuring agreements, definitions, conditions and exclusions of the first underlying insurance policy as shown in the schedule of underlying policies.”

. Umbrella  The policy has a drop—provision in the event of reduction of underlying insurance.  This type of policy should contain at least one enhanced area of coverage that is not found in the underlying insurance policy(ies).  This type of policy typically contains a duty to defend the insured.

. Summary  Common policy to discuss with clients  Care should be taken to quote high limits  Many different types of business are more prone to frequent and severe loss  Normal activities, such as driving, can result in large settlements