Liability policy with high limits covering over the top of underlying, primary, liability insurances subject to a self-insured retention. Cover is usually broader than the primary cover and may have a drop down provision.
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A policy designed to provide protection against catastrophic losses. It generally is written over various primary liability policies, such as the business auto policy (BAP), commercial general liability (CGL) policy, watercraft and aircraft liability policies, and employers liability coverage. The umbrella policy serves three purposes it provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims and it provides protection against some claims not covered by the underlying policies, subject to the assumption by the named insured of a self-insured retention (SIR).