Commercial umbrella coverage is a stand-alone liability policy that is purchased as a supplement to an insured’s general liability, automobile liability and employers liability policies. It provides excess limits over the underlying coverage.
Because it has its own exclusions and amendments, it also provides broader coverage than what is provided in the underlying coverage. Losses that are covered under that broader coverage are subject to a self-insured retention (SIR) that is commonly either $10,000 or $25,000. The umbrella policy coverage is triggered when the limits of the underlying insurance are exhausted or when a claim not covered by an underlying policy occurs.