What it means
An umbrella policy sits above general liability, auto liability and employers liability. It adds limits and, depending on the form, may cover certain claims the underlying policies do not, usually subject to a self insured retention.
An excess liability policy adds limits above a specific underlying policy, often on a follow form basis. It does not usually broaden coverage.
The terms are often used interchangeably on certificates and in contracts. What matters is the actual policy wording, including which underlying policies it sits above and whether additional insureds and primary wording carry through.
An example
A retailer’s contract with Riverbend Logistics requires 5,000,000 in umbrella or excess liability. Riverbend’s broker compares an umbrella that schedules general liability, auto and employers liability with an excess policy above general liability only, and points out that only the umbrella meets the contract’s auto requirement.
Names in this example are fictional.
See this term in your own contract.
Send a lease, subcontract or client agreement with the policies you hold. You get every insurance requirement in it, cited to the clause, set against what your policies say. Free, and back within one business day.
Get a free contract checkUmbrella versus excess, answered
Does a contract that says umbrella accept an excess policy?
Often yes, especially when the contract says umbrella or excess. Some contracts specify follow form or require coverage above specific underlying policies. Read the requirement closely. If the client needs higher limits above auto and employers liability, an excess policy above general liability alone would not meet it.
How much umbrella coverage do small businesses carry?
Many small businesses start at 1,000,000 or 2,000,000, while contracts with large clients, property managers or public agencies may require 5,000,000 or more. The right amount depends on contract requirements, vehicle exposure and the potential severity of claims. Compare the cost of each added layer against those needs.
General information only. It is not legal or insurance advice. Only issued policy documents and endorsements describe actual coverage.