What it means
A follow form policy sits above an underlying policy, such as general liability, and covers the same risks on the same terms, with its own limits. Unless it says otherwise, a claim covered by the underlying policy should be covered by the follow form layer once the underlying limits are used up.
Few policies follow form completely. Many have their own exclusions or conditions that override the underlying terms in specific areas.
Contracts sometimes require that umbrella or excess coverage be follow form, so that additional insured status, primary and noncontributory wording and waivers carry through to the higher limits.
An example
Bridgewater Electrical carries a 1,000,000 general liability policy with a 4,000,000 follow form excess policy above it. The general contractor’s additional insured status under the primary policy carries into the excess layer, because the excess policy follows the underlying terms on additional insureds.
Names in this example are fictional.
See this term in your own contract.
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Is an umbrella policy follow form?
Not necessarily. Many umbrella policies have their own coverage terms and can be broader or narrower than the underlying policies. Some partly follow form for certain coverages. Read the umbrella form to see where it adopts underlying terms and where it uses its own, especially for additional insureds and exclusions.
Why do contracts ask for follow form excess?
Clients want the protection they negotiate in the primary policy, such as additional insured status, to carry into higher limits. A follow form excess policy is designed to do that, subject to its own exceptions. The contract requirement is met only if the excess policy actually follows the relevant underlying terms.
General information only. It is not legal or insurance advice. Only issued policy documents and endorsements describe actual coverage.