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DL 98 04–PERSONAL UMBRELLA LIABILITY POLICY EXCESS HOME DAY CARE LIABILITY COVERAGE ENDORSEMENT

(July 2022)

The DL 98 04 adds coverage, on an excess basis, for a day care that is run from the premises that is part of the described underlying coverage. This can be an invaluable, additional coverage considering the potential for losses involving children.

 

Example: Josie has enjoyed operating “Kid Farm” out of the large house she inherited from her grandfather’s estate. The home has six bedrooms and sits on four acres of land that includes a large pond and a heavily wooded section. Her homeowner’s policy has an endorsement to cover her daycare so her agent recommended that she extend her liability protection onto her umbrella policy.

 

The form has a schedule for identifying the underlying insurance information and entering whether the excess coverage is triggered by an underlying occurrence limit or an aggregate annual limit. It also names and describes the day care business.

Definitions

The policy extends coverage by adding its own defined terms for the following:

 

Retained Limit definition now refers to total limits of any underlying source of coverage that would be available but are not, due to their having coverage periods that are misaligned with the PUP AND which have been reduced or drained by payouts of any kind that occurred before the PUP policy period. (02 15 Change).

Underlying insurance is defined as the described, primary source of coverage for the insured’s home day care operation and at the retained amount that appears in the schedule.

Coverage

The form would apply an excess layer over either a given occurrence amount, or after exhaustion of a given annual aggregate amount for bodily injury or property damage that is related to a home day care operation.

 

Example: Josie is being sued by the parents of one of the young girls who was cared for at “Kid Farm.” Josie normally has a full-time assistant. One day, her helper called in sick. Josie was juggling getting all the kids down for an afternoon nap except for one girl who was filthy after playing on the shore of the property’s pond. She ran water in a tub, placed her in and then went to the nap room. A few seconds later, she heard piercing screams. In her haste, she didn’t check the water temperature which scalded the girl. The damages sought were far in excess of the primary policy’s day care limit.

 

Exclusions

Protection is added primarily by changing exclusion A.3 of DL 98 01 so that the business exclusion makes an exception for home day care services that is performed by an insured.

However, the form does NOT apply to any other business activities. Further, even when the covered day care operation is involved, the coverage does not extend to loss involving any sort of vehicle, watercraft or any incidents related to draft or saddle animals.

 

Example: Josie has another problem. One of the older children she cares for sneaks away from the rest of the kids and takes Josie’s horse for a ride. Being inexperienced, she loses control of the horse and takes a very serious fall that includes being struck and paralyzed by the horse’s hooves. Josie’s umbrella coverage will not respond to this loss.

Sections IV, VI, VII

The form substitutes its own provisions for the following: