This is the most common type. It strictly “follows” the terms, conditions, and exclusions of your underlying policies (like General Liability or Auto).
How it works: It does not broaden your coverage; it simply provides a higher financial limit. If your primary policy excludes a specific claim (e.g., pollution), this umbrella policy will also exclude it.
This type provides broader protection than your underlying policies. It can “drop down” to cover specific risks that your primary insurance may exclude, such as certain international liabilities or false arrest.
How it works: If a claim is not covered by your primary policy but is covered by the True Umbrella, you typically must pay a “Self-Insured Retention” (SIR)—a type of deductible—before the umbrella kicks in.
Key Distinction: Umbrella vs. Excess Liability While often used interchangeably, there is a technical difference:
Umbrella Insurance usually sits over multiple policies (e.g., General Liability + Auto + Workers’ Comp).
Excess Liability strictly sits over one specific policy and increases its limit without offering any broader “drop-down” coverage.
