PU 0001–AAIS PERSONAL UMBRELLA LIABILITY COVERAGE
ANALYSIS
(November 2023)
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The personal umbrella program offered by the American
Association of Insurance Services (AAIS) is like its peer policy forms, opening
with a table of contents. This analysis is of form PU 00 01, edition 10 11. It
is designed to provide excess coverage for AAIS’s 2008 edition underlying personal
lines forms. The UM 00 01 is still available for use with AAIS’s pre-2008
edition forms.
Note: For reference’s sake, we have continued to
indicate differences between this policy and the UM 00 01. They appear in bold
font.
Related Article: AAIS Personal Umbrella Liability
Program Archive
TABLE OF CONTENTS
The table of contents consists of sections covering the
form’s Agreement, Definitions, Principal and Defense Coverages, Claims, Loss
Settlement and Other Insurance Provisions and Policy Conditions.
The form advises of the need to examine the applicable
declarations page for coverage options and schedules which may affect coverage
and to be aware of defined terms. It also advises that an amendatory form,
specific to the state in which the form is issued, also applies.
AGREEMENT
This part states that the policy is subject to all of its terms
and will provide coverage that is described in the policy. These coverages are
provided for a specific policy period. In return for this protection the
insured must pay a premium as required.
DEFINITIONS
The
following terms have special meaning under form PU 0001:
1. You and Your
The
person(s) who appear on the declarations as insured(s). The named insured’s spouse
is also defined as you, but ONLY if he or she lives in the insured's household.
2. We, Us, And Our
The
company providing the liability coverage.
3. Aircraft
This
term is used only in the Liability section and refers to property made or used
for flying. If a model aircraft or model hovercraft is not designed or used to
carry people or cargo, it is not considered aircraft. Also, a hovercraft is not
considered aircraft. (2011 Change)
Note: It will be interesting to see how
policy language may change in response to increasing exposure from drones.
4. Bodily injury
Actual or physical harm to a
person. Harm includes sickness, disease, or death. Claims involving necessary
care and loss of services also qualify as bodily injury.
However, the definition does NOT
apply if injury, illness, disease, or death results from any form of mental or
emotional injury that does not stem from actual, physical harm.
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Example: Bryson
has been undergoing treatment for severe anxiety attacks and a fear of
getting behind the steering wheel of any vehicle. The emotional damage occurs
after: Scenario 1: Bryson is severely
injured during a collision caused by another driver–Bryson’s emotional injury
may qualify for coverage. Scenario 2: Bryson is
traumatized by a near-accident where the other driver stopped mere inches
away from his vehicle – Bryson’s emotional injury does not qualify for
coverage. |
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5. Business
A trade, profession, or occupation
(including farming) even if only occasionally practiced. The rental of property
to other parties is also considered a business.
If an insured receives money for
an activity, it is considered a business. There are exceptions though. If an
insured is caring for a relative, it is not a business even if money is
exchanged. When an insured cares for a person, other than a relative, and, in
exchange, receives like services, it would not be considered to be business
activity.
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Example: Don
and Willie have been neighbors for years and both are sticklers for caring
for their lawns, shrubs, and flowers. During the summer and fall, they have
an agreement. Once or twice a week, Don cuts Willie’s lawn. In exchange,
Willie expertly trims and shapes Don’s shrubs. As long as neither receives
any additional benefit from the agreement, a loss involving either activity
should not be considered a business. |
Volunteer activities are not treated
as business activity even if the insured receives reimbursement for expenses.
However, if significant compensation is provided (see the note below), the
activity no longer qualifies for an exception and the activity is considered a
business. Also, part-time, or seasonal activities involving minors are not
considered to be business activity.
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Example: Judith
and Sally want to start saving money for next year’s vacation. During their
entire school Christmas break, the sisters make and sell pine wreaths. They
earn nearly $200 selling to their friends and their neighbor’s families. This
would be an exception to the “business” definition. |
Note: Any business activity not described
above is classified as ineligible, with ONE important exception. If an insured
receives less than $2,500 in compensation in the 12-month period before the
applicable policy period’s beginning, it is NOT treated as a business. (2011 change – not a defined term under UM
0001)
6. Declarations
This term refers to any document
that is related to the homeowner policy and which may be called Declarations, Supplemental
Declarations, or Schedules.
Related Article: Personal
Umbrella Declarations Page
7. Domestic
employee
A person employed or leased under
contract by an insured to perform duties that are connected to the use and care
of the described location such as a butler, housekeeper, or gardener. Included
are persons who perform duties of a similar nature elsewhere for an insured
provided the duties do not include business related
functions.
A person who is furnished to the
insured as a temporary substitute or to meet seasonal or short-term needs is
not a domestic employee.
8. Employee
Refers
to a party who is employed in the business of an insured. The term includes a person
who is hired via a labor leasing arrangement. The duties of such persons must
involve an insured’s business and not the residential or personal-oriented activities
performed by a domestic employee. (2011
change – not a defined term under UM 0001)
9. Fungi
Any
fungus (including but not limited to mildew and mold) as well as any substances
released or created by such matter qualifies as fungi. Included as a substance
are metabolites. (2011 change – not a
defined term under UM 0001)
Note: Metabolites are products that are produced by metabolic
change.
10. Household Member
This term applies to persons who
are related to the named insured and who live in his or her home. Age matters -
household member is expanded to include persons who are younger than:
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25 – when such persons are financially supported
by the named insured, are full time students and who lived in the named
insured’s household immediately before leaving for school.
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21 – who are not related to the named insured,
live in the named insured’s household, and are cared for by a named insured’s
relatives.
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21 – who are not related to the named insured,
are full-time students, and are cared for by the named insured or the named
insured’s relatives and who lived in the named insured’s household immediately
before leaving for school.
This
term also applies to a person who does not fit under the previous descriptions
of household member, but only when such a person lives with the named insured as
a member of the named insured’s household and is not a houseguest, tenant, roomer,
or boarder, and who does not perform any sort of work for the named insured.
Finally, a person under 21 who lives with and is legally cared for by a person
in the prior, omnibus category, is also considered a household member. (2011 change – not a defined term under UM
0001)
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Example: A personal umbrella liability policy is issued to Mona
Lisa. Mona’s life partner and her 20-year-old son live with Mona. They are both
considered “household members.” |
11. Hovercraft
This term is used only in the
Liability section and refers to machines (including property called flarecraft)
that are capable of traveling over ground or water via the use of a compressed
air cushion. The term does not apply to motor vehicles, aircraft, or
watercraft. It also does not refer to models of hovercrafts, aircraft or
watercraft that are neither designed nor used for moving people or property.
12. Insured
This definition is a
little complicated as it, in turn, is defined by making
reference to other defined terms. Persons who qualify as insured are
those parties who are eligible for coverage under the primary sources of insurance
protection that form the underlying insurance to the applicable umbrella policy.
Every eligible party is treated as a separate insured; however, the mechanics
of providing available coverage has no affect on the maximum amount that
appears as the policy’s limit (also a defined term).
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Example: Billy
was a guest at the Dudleys’ home for their annual, neighborhood picnic. Part
of the picnic’s activities is a tug of war with the Dudley family taking on
all comers. During one hotly contested battle, the Dudleys win on a last,
ferocious tug. Billy, who was on the opposing team and had the rope around
his waist was severely hurt and suffered paralysis. He sued all five of the
Dudleys in separate lawsuits. The Dudleys’ umbrella policy recognizes the
Dudleys as separate insureds, but the policy’s million-dollar limit is the
most available to respond to Billy’s multiple lawsuits. |
Treating each
insured separately includes the consideration that each party must meet the
obligations of the umbrella’s applicable conditions.
In addition, there
are a number of persons who are insured based on conditions and circumstances:
Any person making use of a
motorized vehicle or watercraft is disqualified as an insured unless he or she believes
they had an insured’s permission to make use of the vehicle or craft. The
permissive use condition does not apply to related household residents or household
residents who are younger than:
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25 – when such persons are financially supported
by the named insured, are full time students and who lived in the named
insured’s household immediately before leaving for school.
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21 – who are not related to the named insured,
live in the named insured’s household, and are cared for by a named insured’s
relatives
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21 – who are not related to the named insured,
are full-time students, and are cared for by the named insured or the named
insured’s relatives and who lived in the named insured’s household immediately
before leaving for school.
However, the latter exception only
applies when these parties are operating vehicle or craft that are owned or leased
by a named insured or resident spouse.
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Example: Larson
and Garietta Deafhound are married and they are insured under a personal
umbrella policy. One of Garietta’s sisters goes through a bitter divorce.
Garietta invites her and her twin teenage daughters to come live with them. A
couple weeks after moving in, the twins sneak off with Larson’s favorite car
to go shopping and, due to icy roads, they cause a collision. In this instance,
the twins would be considered insureds under the Deafhounds’ policy. |
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Related
Court Case: Was Adult Son An Insured?
Note: Any reference in the policy to an insured also applies to more than one insured person.
13. Insured premises
Taking advantage of the fact that
the umbrella policy is intended to provide excess coverage for underlying (primary)
exposures, the form merely defines an insured premises as any and all premises
that qualify for the applicable underlying coverage’s protection.
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Example: A personal umbrella liability is written for underlying
HO Policies A, B, and C. All three policies and their umbrellas have 06/01/23
effective dates. On 07/15/23 each homeowner buys a cemetery plot, but does
not report the purchase to their insurer: |
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HO Policy |
Policy’s Insured
Premises Definition |
HO Loss |
Umbrella’s Insured
Premises Status As Of the Loss Date |
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Policy A |
…includes newly
acquired cemetery plots automatically |
Policyholder is sued
for an injury occurring at the plot site on 09/01/23 |
Site qualifies as an
insured premises |
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Policy B |
….includes
newly acquired cemetery plots, but must be reported to insurer within 30 days
of acquisition |
Policyholder is sued
for an injury occurring at the plot site on 09/01/23 |
Site disqualified as an
insured premises on 8/15/23 (not reported in 30 days) |
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Policy C |
….newly
acquired cemetery plots are ineligible for coverage |
Policyholder is sued
for an injury occurring at the plot site on 09/01/23 |
Site does not qualify
as an insured premises |
14. Limit
The policy merely defines this as
the amount of coverage that applies.
15. Motorized vehicle
Land
or amphibious vehicles that are self-propelled qualify as motorized vehicles. An exception exists for hovercraft, model
hovercraft, watercraft, or model watercraft. However, the term does apply to
trailers that are either attached to or towed by motorized vehicles. The term
also applies to trailers that become detached (during their use with a
motorized vehicle). (2011 change). Unlike the UM 0001, no reference is made to
motorized items that assist the handicapped.
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Example: An insured’s trailer damages another car: Scenario 1: When it
becomes disconnected from the hitch on the insured’s car and strikes the
other car. The trailer qualifies as a motorized vehicle. Scenario 2: When it
rolls out of the insured’s driveway and strikes the other car. The trailer
DOES NOT qualify as a motorized vehicle. |
16. Occurrence
There are three specific
requirements for an occurrence. First, there must be an accident. This means
that the incident(s) cannot have been planned. There can be repeated accidents
and still be the same occurrence. Second, bodily injury or property damage must
result from the accident(s). Last, the bodily injury or property damage must
happen during the policy period.
Related Court Case: Suit Ineligible,
Occurred Before Effective Date
17. Personal Injury
The policy specifies several
situations as incidents of personal injury such as arresting or imprisoning
another party under false circumstances. Wrongful entrance, eviction and
detention, misrepresentation, libel, slander, character defamation, invading
another privacy and malicious prosecution are also referenced as personal
injury.
18. Pollutant
Any solid, liquid, gaseous,
thermal, or radioactive irritant or contaminant, including acids, alkalis,
chemicals, fumes, smoke, soot, vapor, and waste. Also, electrical, magnetic, or
electromagnetic particles or fields – visible or invisible. Sound waves are
also classified as a source of pollution.
Waste includes materials to be
recycled, reclaimed, reconditioned, as well as such material awaiting disposal.
Of course, the notion of pollutant may still find plenty of area for debate:
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Example:
Jameson and Judy are loading their SUV with more than a dozen gallons of
paint. They’re in a hurry so Judy jumps in and starts the car before Jameson
can close the rear door. As she moves forward, she stops suddenly when
Jameson yells about the door. The abrupt braking causes all of the cans to tumble
out. Most of them tumble across their yard and then downhill to their
neighbor’s yard where they open and splash into the neighbor’s pool. Scenario 1: The cans were new and intended for painting
Jameson’s and Judy’s rental home. Scenario 2: The cans were leftovers from previous painting
projects and intended for transport to a local drop-off site for toxic
material. Under the pollution definition, scenario 2 may appear to
be excluded, but it is far more likely that the situation would be litigated. |
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19. Property damage
Physical injury or destruction of
tangible property, or the loss of use of tangible property, whether or not it
is physically damaged (in other words, theft qualifies as property damage).
20. Suit
Refers to mutual agreements (or mandates)
to participate in arbitration, alternative dispute resolution (mediation) and
to judicial proceedings involving dealing with parties seeking compensation (via
this insurance policy) for bodily or personal injury and/or property damage. However, this term does not apply to such
situations in which an insured agrees to participate in, without the insurance company’s
agreement. (2011 change).
21. Terms
Refers to any written policy
components including exclusions, conditions, defined words, etc.
22. Underlying Insurance
The term applies to any
(liability) coverage described in the umbrella policy’s underlying insurance
schedule per the listed limits and dates as well as any policies that are
replacements for the listed coverages. However, any replacement policies
qualify as underlying insurance only if they offer the same scope of protection
and amounts of the coverage being replaced.
Related Article: Personal
Umbrella Underlying Insurance Requirements
23. Underlying Insurer
Refers to any company who provides
coverage that qualifies under the policy as “underlying insurance.”
24. Watercraft
With regard to
the liability coverage, this term refers to items that are designed for
traveling over water, whether powered by engines, motors, or wind. There’s no
reference to manually powered, small craft (such as canoes, rafts, or
rowboats). The term does not apply to motor vehicles (including those
that qualify as “motorized vehicles”), aircraft, or watercraft. The term also
does not apply to models of hovercrafts, aircraft or watercraft that are
neither designed nor used for moving people or property. (2011
change – not a defined term under UM 0001)
PRINCIPAL COVERAGE
Under this section, the insurer states its coverage
obligation. It will respond to losses involving bodily injury, personal injury,
or property damage (as defined in policy) when such injury or damage qualifies
under the umbrella (and underlying) policy parameters. The umbrella policy’s
coverage obligation depends not only on any applicable exclusions (that are
listed in the policy and, by extension, underlying coverages) but also on whether:
- Any
bodily injury or property damage is created by an occurrence (as defined
in the policy)
- Personal
injury is related to an offense that takes place during the policy period
It also states that there is no other obligation to respond
(with payment or services) except for those items the policy makes available
under its “Defense Coverage” section.
DEFENSE COVERAGE
1. Under this section, the form explains that the insurer owns a
right to provide a legal defense and evaluate and/or settle either claims or lawsuits
involving losses that qualify for coverage under the policy. Since coverage
under an excess policy depends upon activities in the primary layer of policies,
an umbrella insurer has a vested interest in evaluating incidents that may
trigger excess coverage. Therefore, the form states that the insurer also has
the right to become involved with the policy’s insureds and/or the underlying
insurance providers regarding defending against, evaluating and or settling
claims or situations that may need to be handled by the umbrella. But whatever
the umbrella insurer decides, their action does not mean they have a duty to pay
for any loss-related costs/expenses paid or incurred by other insurers. The
umbrella insurer only intends to protect its right of involvement that allows
it to efficiently assess its possible exposure.
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Example: Harmful Casualty writes an umbrella policy
for the Glumersons. Harmful discovers that the Glumersons’ homeowner insurer
is handling a loss involving Mr. Glumerson where he severely injured a person
in his home. Harmful made its own investigation, spending several thousand
dollars, before concluding that, due to the injury being directly related to
an unreported in-home business, it was unlikely that the umbrella would have
to respond to the loss. |
2. Any obligation to defend
against a suit or claim only applies to damages that, while eligible for
coverage by a primary source of coverage, are not paid because those sources
are exhausted due to payment. The umbrella’s defense obligation also applies to
incidents that are not insured by other sources of coverage, but which do
qualify for umbrella coverage subject to the policy’s applicable retention
(which is the insured’s responsibility to pay).
Note: The form states that
no obligation to defend exists if a loss does not exceed the applicable
retention.
The insurer’s defense obligation
ends if that insurer pays an amount equal to the applicable policy limit in the
form of a settlement or a judgment.
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Example: Harmful Casualty writes an umbrella policy
for Jip and Parla Plunker. Harmful discovers that the Plunkers’ auto insurer
is handling a loss caused by Jip. A couple of months earlier, Jip tried to
pass a school bus that was merging onto a highway. He ended up hitting the
bus, severely injuring many of the student passengers. Harmful starts its own
investigation when the primary carrier notifies them that they are settling
the loss for their $500,000 limit. Harmful concludes that the level of legitimate
damage and injuries is so great, it is best to pay out its limit. Harmful
does so and then notifies the Plunkers that they will not be involved with
providing a legal defense. |
This section also states that the
policy will reimburse its insured for expenses that it approves in writing when
circumstances prevent the insurer from fulfilling the umbrella agreement, such
as being barred from involvement by a given jurisdiction where a loss occurs.
3. Claims and Defense Cost
In a defense action, the insurance
company will pay:
·
the costs that are taxed to an insured and the
costs incurred by the insurance company
·
the necessary costs incurred by the insured at
the request of the insurance company including an insured’s lost earnings
caused via time spent away from work (the lost earnings reimbursement is
subject to a $250 daily maximum). (2011 change – subject to a maximum of $100
per day under UM 0001)
·
the interest that accrues after the entry of a judgment
up to the point of time that limit of the policy is either paid or offered in
payment
·
the premiums on bonds but only for an amount up
to the limit in the policy
·
the premiums for bail bonds that arise from an
accident or a traffic violation, but only when such events are related to a
circumstance involving a covered vehicle. Such
payments will be for only that part of the premium up to the policy limits. (2011 change – subject to a maximum of $500
under UM 0001)
·
the portion of prejudgment interest levied
against the insured. The amount of such interest that is paid is based upon the
timing of any final payment or offer of payment made by the insurer
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Example: |
EXCLUSIONS
This policy does not
apply to:
1.
Bodily injury, personal injury or property damage that are created by any
insured’s business activities. More specifically, the PU 0001 does not respond to losses that involve
business activity taking place on any premises (including vacant land) that a
named insured owns or leases, nor involving such activity in which an insured
participates, regardless the location. The bar to coverage applies regardless
whether the insured owns the business, operates the business or whether an
insured is an employee of the business.
Related Court Case: Business Related Slander Not Covered
This business exclusion is effective whether any injury or damage is
caused by either an act or a failure to act and regardless whether, due to the
type of activity, any level of duty is owned, implied, promised or provided.
This exclusion is NOT affected by whether coverage exists for the activity
in the applicable, underlying insurance.
The business exclusion has many exceptions, including for loss involving:
·
Renting, on
an occasional basis, premises that is normally used by the insured household
·
Renting or
leasing part of a premises that is not normally used by the insured household,
as long as no rental unit is used by more than two roomers or boarders
·
Renting or
leasing any other insured premises (in part or wholly) as long as it is used as
a residence
·
Renting or
leasing any part of the insured premises for use as a school, studio, office,
or garage (private)
The exclusion does not bar ALL business activity. There is coverage for
loss involving:
·
Insureds
younger than 21 when that activity is not full-time, is self-employment, has no
other employees and a loss is related to that business
·
Any insured’s
participating in civic or public pursuits. However, no compensation must be
involved other than reimbursement of related expenses
·
Use of
“motorized vehicles” IF the activity is eligible for coverage by the applicable
underlying insurance. However, this exception is void if any transport of cargo
or persons are involved (other than carpools).
2. Bodily injury or property damage resulting from rendering
or failing to render a professional service.
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Example: Dr.
Henry Skilcutter enjoys playing basketball on Sunday nights. He and a group
of other dads play at their kids’ school gym. The guys nickname Henry, Dr.
Hoops. One Sunday when only ten guys show up, one of the players falls and
hurts his knee. He asks Dr. Hoops to look at it. Henry gives it a quick look
and says, mindful that they need this guy in order to have a full court game,
that he could walk around a little bit and then continue to play. The injured
guy re-joins the game, goes up for a rebound and lands on the leg he
previously injured. He crumples to the floor with a loud yell and he is in
AGONY. It turns out that his knee injury was serious and he should have
sought treatment. He ends up being hospitalized and having a partial leg amputation
because of an untreated infection. He sues Dr. Hoops for telling him it was
okay to keep playing. This loss would not be covered by Henry’s policy since
it involved professional medical advice. |
Related Court Case:,
Common Meaning of “Professional Services” Upheld
3. Bodily injury, personal injury, or property damage resulting from an
insured’s serving on a board of directors. However, the policy offers an
important exception, permitting coverage when a loss is related to service on a
board for a non-profit organization AND the insured is not paid for his or her
work. The exception still applies if a not-for-profit entity’s board member is
reimbursed for expenses.
4. Bodily injury, personal injury or property damage that is
related to any sort of polluting activity, even when injury or
damaged is alleged or threatened. The exclusion applies to whatever manner the
activity occurs, whether it is sudden or slow and regardless whether it affects
land, water and/or air.
Related Court Case:
Claim For Release Of Mercury From Container Denied Under Pollution Exclusion
This pollution
exclusion does make exceptions. It does not apply to incidents involving heat,
smoke or fumes that are created from an accidental fire at a premises that is
insured by the policy.
Note: Further, the exclusion is
inapplicable to BI or PD related to any incidences of motorized vehicle use or
ownership when such losses are eligible for underlying insurance coverage.
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Example: The Hardballs have an auto policy and an umbrella
policy. They live in a very upscale, gated community. One day, their teenage
son collides with a “Lawn Lords Inc.” trailer that is carrying a large tank
filled with pesticides. The tank is knocked over and breaks open, spilling
across lawns, tennis courts and the community’s retention pond. Estimates are
that it will take hundreds of thousands of dollars to clean up and then
monitor the effects of the spill. Scenario 1: He hit the trailer with the family’s SUV which is covered
under their auto policy – the umbrella would respond to this loss. Scenario 2: He hit the trailer with the family’s all-terrain, off-road
vehicle which is not covered under their auto policy – the umbrella would NOT
respond to this loss. |
5. Bodily
injury, personal injury, or property damage because a communicable disease
is transmitted by an insured. (2011
change – not a specified exclusion under UM 0001)
6. Bodily
injury, personal injury, or property damage due to sexual molestation. (2011 change – not a specified exclusion under
UM 0001)
Any claim or suit that makes reference to sexual molestation would be barred from
protection under the PU 0001.
7. Bodily injury, personal injury or
property damage that is a result of physical or mental abuse. (2011 change –
not a specified exclusion under UM 0001)
Related Court Case: Stabbing
Attack Excluded Under HO Policy
8. Bodily
injury or property damage that arises out of corporal punishment. (2011 change – not a specified exclusion
under UM 0001)
9. Bodily
injury or property damage arising from any aspect of the illegal drug trade.
This includes manufacturing, selling, using, delivering, transferring, or
possessing of a controlled substance such as cocaine, LSD, marijuana along with
other narcotic and hallucinogenic drugs by anyone. (2011 change – not a specified exclusion under UM 0001)
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Example: The Trustermans allow their son to hold a party
in their home one weekend. Several people are
seriously injured by a guest who took a hallucinogenic drug and attacked
other guests with a bat. This loss is ineligible for coverage. |
Note: An important exception exists. Coverage does apply to any
instance that is eligible for coverage in the applicable underlying insurance
policies.
10. Bodily injury personal injury or property damage resulting from an
insured being electronically aggressive
(this is not defined in the policy). However, coverage is barred for
incidents of use of electronic forums to bully or harass other persons. Methods
that are specifically mentioned include blogs, electronic bulletin boards, chat
rooms, gripe sites, social networks, email, and messaging (text and instant
messaging).
Note: The exclusion mentions both blogs
and weblogs, though they are the same method. This exclusion is likely to have
been introduced to avoid the umbrella being called on to respond to bullying
claims. Of course, such claims can often involve other aspects that may make
coverage debatable such as incidents that also include off-line activity (such
as bullying at school as well as online), the age of the persons facing
allegations and whether such acts may also be classified as intentional or as
acts of abuse. (2011 change – not a
specified exclusion under UM 0001)
11. Bodily injury personal injury or property damage related to any
violation of either the Telephone Consumer Protection Act, the CAN-Spam Act,
or any other law (federal, state, or local) that restricts or bars the
distribution or transmitting of materials or information.
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Example: Hannah is excited about her first chance to run
her church’s silent auction. She wants to make her mark by really promoting
the event. She buys an email list from another individual and uses it to send
out several promotional emails that are received by thousands. She is sued for distributing unsolicited emails, which violates a
state spamming law. Her umbrella insurer will not respond to the suit. |
12. Bodily
injury or personal injury that is experienced by the named insured, resident
spouse, relatives, and persons younger than 21 who live in the named insured’s
home. The exclusion applies to younger residents in the care of either the
named insured or that insured’s relatives (living in the same household).
Note: The form makes specific reference to
its defined term, “household member.”
The exclusion also applies to
attempts to get contributions toward damages owed to an insured or household
member. Regardless of the mechanics involved, the umbrella, via this exclusion,
is insulated from treating first parties as third-party claimants.
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Example: George was remodeling his basement and
asked his wife, Freda, to assist with installing new stairs. While testing
the stairs to see how well they fit, Freda pushes the stairs against the basement
doorway. George, not knowing that the stairs had not been attached, steps on
them. He falls and ends up permanently paralyzed. He sues Freda under their
umbrella policy for negligence. George’s claim is ineligible for coverage. |
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13. Bodily injury or property
damage resulting from an insured owning or leasing an aircraft or hovercraft.
There is also no coverage for any person who operates, maintains, uses,
occupies, loads, or unloads an aircraft or hovercraft. In addition, if an
insured entrusts or loans an aircraft or hovercraft to a person, there is no
coverage. Finally, there is no coverage for the insured’s negligence or
nonexistent supervision of a person as respect to an
aircraft or hovercraft. This
exclusion does not apply to bodily injury that may occur to a domestic employee
of the insured if the injury occurs in the course of that employee’s duties.
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Example: Omelia Groundheart is a radio-controlled
airplane enthusiast. One day, while operating a German-style WWI model craft
in a city park, she loses control and the model plane crashes, propeller
first, into a toddler. His injuries required immediate surgery with the
prognosis that several more major surgeries will be
necessary in the next two years. The $600,000 lawsuit her parents file
against Omelia would be covered by her umbrella policy. |
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|
Example: Omelia Groundheart is a radio-controlled
airplane enthusiast. One day, Omelia’s maid is cleaning the hobby room where
Omelia’s collection of model aircraft is stored. While dusting a German-style
WWI model craft, the engine starts and the model plane crashes into the maid,
severely cutting her face and knocking her backwards into some glass
shelving. Her medical expenses and severe injuries would be addressed by
Omelia’s umbrella policy. |
14. Bodily injury or
property damage when such injury or loss is related to another party’s use of
aircraft, or hovercraft and an insured is, indirectly, liable for the
injury or damage because that person is a legal minor. The exclusion is still
effective even if such liability is assigned by law.
15. Bodily injury or
property damage resulting from an insured owning or leasing a motorized vehicle.
There is also no coverage for any person who operates, maintains, uses,
occupies, loads, or unloads a motorized vehicle. In addition, if an insured
entrusts or loans a motorized vehicle to a person, there is no coverage.
Finally, there is no coverage for the insured’s negligence or nonexistent
supervision of a person with respect to a motorized vehicle. While the umbrella
policy WILL provide coverage for these sources of loss when it is insured by
the applicable primary insurance, the umbrella still excludes such loss that
involves no-fault (or similar) coverage, uninsured/underinsured motorists
coverage or medical expense/payments (or similar) coverage.
16. Bodily Injury or property
damage that is related to any incidents of watercraft ownership, leasing, or
use. No coverage exists for entrusting or loaning watercraft, for loss
involving negligent supervision or involving the maintenance, use, occupancy or
loading/unloading of a watercraft. However, the umbrella will provide
protection on an excess basis for instances that are protected by the
applicable, primary coverage. The exception applies even when primary coverage
does not exist due to exhausted limits.
However, regardless the existence
of other coverage, this umbrella will not respond to a loss that involves
participation or preparation for any sort of race or competition (with the
exception of sailing vessels or involvement in predicted log cruises). The
umbrella excludes loss that involves uninsured/underinsured boaters coverage or
medical expense/payments (or similar) coverage.
17. Bodily injury or property damage resulting from an insured’s
vicarious liability for the actions of a legal minor when the injury or
damage involves a motorized vehicle or watercraft (regardless whether that
liability is legally imposed). The umbrella policy WILL provide coverage for these
sources of loss when it is insured by the applicable primary insurance.
18. Bodily injury or property damage connected to using or readying to
use a motor vehicle (including trailers) in a pre-arranged or organized race
or other competitions and activities.
19. Bodily injury or property damage caused by war or warlike situations
including:
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undeclared war |
civil war |
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insurrection |
rebellion |
|
revolution |
warlike act by a military force or military personnel |
|
destruction, seizure, or use of property for a military
purpose |
discharge of a nuclear weapon (even if accidental). |
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defense/hindering hostilities by military force |
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20. Bodily injury or property damage involving a covered person who is
either covered by a nuclear energy liability policy or would be covered
except that such a policy has used up (exhausted) its policy limits. For
purposes of this exclusion, a nuclear energy liability policy is one that has
been issued by American Nuclear Insurers, Mutual Atomic Energy Liability
Underwriters, Nuclear Insurance Association of Canada, or any company that
replaces (succeeds) them.
21. No coverage under this policy is available for bodily injury involving
exposure to lead.
22. Bodily injury to any person who is protected by a workers
compensation policy or who should be protected by benefits mandated by a
law regarding workers compensation, non-work-related disability, or work-related
disease. This exclusion applies to domestic employees.
Note: The intent of this
exclusion is to prevent the umbrella responding with payment that duplicates
coverage that exists under a workers compensation or other policies.
23. No coverage under this policy is available for personal injury
related to exposure to lead
24. Personal injury due to any act committed by an insured or was
ordered by an insured, when the insured is aware that the activity would represent
an invasion of rights or personal injury.
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Example: Larry
runs a thriving plumbing business from his home. The home and in-home
business are listed on the schedule of his umbrella policy. Larry is sued by
a competitor. As it turns out, Larry wrote about the competitor on his blog
that the competitor was not bonded nor formally trained for the work he
performs. The competitor loses several clients and contracts and the losses
can be tied directly to the blog comments. Larry was well aware that his comments
were lies. His umbrella will not respond to the lawsuit. |
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25. Personal injury suffered by a person who works for an insured when
that injury is related to the work performed for the insured. This
exclusion applies for both direct and indirect injury and includes employees as
well as workers acquired under a labor lease contract.
26. Personal injury due to an insured’s oral or written communication
(including electronic) of information when it first occurs before the
umbrella policy’s effective date.
Note: Therefore, even if a lawsuit is triggered by a republication
after the umbrella’s effective date, it would be barred from coverage.
27. Personal injury due to the oral or written communication (including
electronic) of information when it is committed by or at the direction of
an insured and the insured knows the information is not true.
28. Personal injury that stems from any
form of contact with bacteria, fungi wet rot or dry rot. The exclusion applies
to both direct and indirect contact. (2011 change – not a specified exclusion
under UM 0001)
29. Personal injury related to an
insured’s direct or indirect criminal activity.
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Example: John
and Bryon are both vying for a single columnist job with a well-known
Internet sports site. They are told to make sure they are available between
2:00 and 5:00 on a certain Friday for separate, final phone interviews and,
being friends, they share that they are both awaiting the final chance. John
suggests that, to calm their nerves, they play tennis on Friday morning. John
asks Byron to go to a shed and get his tennis equipment. As soon as Byron
enters the shed, John closes and padlocks the heavy, wood door. He lets an
enraged Byron out at 5:30, after John wins the job by default. Byron sues John
for the illegal confinement. John’s umbrella insurer will not respond to this
claim. |
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30. Personal injury related to activity
on electronic chat rooms, networking, and similar sites that an insured hosts,
owns or administers. An exception is made for information that an insured posts
or for information that an insured makes available for others to post to a web site,
blog, or other forum. (2011 change – not
a specified exclusion under UM 0001)
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Example: Lonnie
is a real sports fan for his hometown teams. For nearly two years, he has
been running a site that covers local high school, area colleges and
professional teams. Lonnie is an avid participant and that has caused some
trouble. After months of complaining about a local high school football
team’s coaching, that team’s head coach is fired.
The ex-coach files suit against Lonnie, alleging that he consistently made
claims that were untrue and that triggered his dismissal. Lonnie’s umbrella
would respond to this suit. |
31. Damage to property owned by an insured
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Example: Narnia
Wood’s home is destroyed by a devastating fire. Her HO coverage handles most
of the loss, but, unfortunately, her basement, guest room and attached garage
were all filled with expensive, classic, and antique furnishings she had just
received from her mother’s estate and they were all destroyed. Narnia submits
a loss to her umbrella insurer for the $85,000 property damage that was not
covered by her primary coverage. Her umbrella insurer reminds her that its
policy provides liability coverage to others, not property damage for her own
belongings. |
32. No coverage under this policy is available for bodily injury
related to exposure to lead.
33. Bodily injury or
property damage expected by, directed by, or intended by an insured, as a
result of a criminal act of an insured, or the result of an
intentional and malicious act by or at the direction of an insured
Note: This exclusion applies even if the
bodily injury or property damage that occurs is different than what was
expected by, directed by, or intended by the insured, or if someone suffers the
bodily injury or property damage other than the person or persons expected by,
directed by, or intended by the insured.
Related Court Case:
Intentional Injury Covered By Homeowners Insurance For Death, Damages
Caused By Youths
This exclusion makes
an exception for bodily injury or property damage that is caused by an insured
using reasonable force to protect people or property.
|
Example: A year
ago, Anna had an alarming night. She awoke to the sound of very heavy
“thumps” against her front door. She sprang up when she heard it crash open.
She located her registered pistol and, carefully, quickly made her way
downstairs. A large man was rambling and lurching across her living room, running
into, and damaging furnishings. She yelled at him to stop and to leave. His
actions indicated that he was very drunk. Instead of leaving, he started
yelling and approaching Anna. She shot and wounded him twice and then called
the police. The drunken intruder, who ended up paralyzed, filed suit against her. Her underlying and umbrella insurers
agreed to handle the lawsuit on the basis of an action of self-defense. |
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34. Liability assumed under a contract or an agreement. However, if
contractual coverage is available in the underlying coverages, the umbrella
will follow form.
|
Example: Pete
D. Lapidated hires Perilous Painters, a small company owned by his college
pal Jesse, to paint the interior and exterior of his home. While in a hurry
to get the front of the home painted, a couple of Jesse’s employees unload an
extension ladder from their van. While rushing to get it set up, they ram the
ladder into a young mother and her preschooler, who were passing by on the
sidewalk. The mother sues Perilous Painters. Jesse tells Pete that his
business is close to failure and that he doesn’t have any insurance. Pete,
the ol’ softie, agrees to sign an agreement to handle any losses related to
the painting job. Pete just agreed to pay this entire suit out of his personal
assets because there is no coverage available under his umbrella policy. |
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35. Liability for any request by an association of property owners to
share expenses for a joint financial obligation (an assessment).
36. All costs and
expenses that are, in any manner, related to any party’s request that an insured
mitigate, remediate, test
for, assess or monitor the impact of pollutants. This exclusion even
applies when a request or order comes for a unit of government and regardless
whether the request or requirement results from a formal order, claim or lawsuit.
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Example: Clara,
while at a U Pick Pumpkin Farm, lost control of her car and smashed into one
of the farm's heating oil tanks. A month later, she turns in a bill she
receives from the farm. It is for remediation and testing an acre of soil at
the farm. This would be ineligible for coverage. |
37. All costs and expenses that are, in any manner, related to any
party’s request that an insured mitigate, remediate, test for, assess or
monitor the impact of lead. This exclusion even applies when a request or order
comes for a unit of government and regardless whether the request or
requirement results from a formal order, claim or lawsuit.
|
Example: The Chalkertons have a homeowner policy
and an umbrella policy. Their homeowner coverage includes an endorsement for
both property and liability coverage for a four-unit apartment building that
was built in the 1940s. While attempting to sell the building, an inspection
reveals that all of the building’s interior walls have several levels of
lead-based paint. The building’s tenants all file
lawsuits to have the paint removed and the building detoxified. The
Chalkertons’ umbrella policy will not respond to this loss. |
38. All costs and expenses that are, in any manner, related to any
party’s request that an insured mitigate, remediate, test for, assess or
monitor the impact of bacteria, fungi, or rot (wet or dry). This exclusion
even applies when a request or order comes for a unit of government and
regardless whether the request or requirement results from a formal order, claim
or lawsuit. (2011 change – not a
specified exclusion under UM 0001)
39. Any illness, disease, or death of a
domestic employee of which the insurer fails to receive written notification within
36 months after the end of the policy period in which the injury took place. (2011 change – not a specified exclusion
under UM 0001)
WHAT YOU MUST DO IN CASE OF LOSS OR
CLAIM
This section of the policy discusses a very important part of the
policy, the promise of the insurer, under described circumstances, to pay for a
loss and/or defend against a claim or lawsuit. Since the policy is a contract,
both the insurer AND the insured have responsibilities. The manner in which an
incident is handled by an insured is a critical matter. It increases the
policy’s ability to function as intended. The policy lists the responsibilities
and it also makes references to parties that represent an insured as well as
refers to responsibilities owed to primary liability insurers. The form
indicates that the failure of an applicable insured to perform a required duty
may relieve the insurer from having to respond to a claim.
1.
Cooperation With Underlying Insurers (this title is NOT
used in the umbrella policy)
The insured is required
by the umbrella policy to follow all of the provisions that apply to the
underlying insurance policies. The insured must also assist those insurers in
the manner laid out by their various policy conditions.
Note: This is a very important provision since the umbrella insurer may assert
its rights by requiring compliance with provisions in underlying coverages that
are not specifically mentioned in the umbrella policy.
2.
Notice (this title is NOT used in the umbrella
policy)
When a loss or an event that may lead to a
loss occurs, the insured is obligated to quickly contact the umbrella insurer
and make sure that adequate information is contained in the notification.
While speed in reporting a loss is important,
quick notification is useless if it doesn’t include enough information with which
to make decisions. Therefore, the notification has some content requirements.
Specifically, the notice should include the following:
·
The name of the named insured
·
The policy number
·
The time, place, and the details of the occurrence
·
The names and addresses of all known potential
claimants and witnesses
The above action serves important functions.
First, they permit the company to begin the loss investigation process,
including any action to protect its rights and to determine if an insured is
actually liable for payment under the policy. The reporting duty also minimizes
fraud on the part of an insured. This aspect of the provision is less important,
though, because in nearly all instances, a legitimate loss is likely being handled on a primary insurance level.
Note: While the
provision does not state that notification has to be in writing, in order to
comply with notification requirement, doing so in writing is a natural
consequence.
3.
Volunteer Payments
An insured must not make payments, pay, or
offer rewards, or assume obligations or other costs, except at the insured's
own cost. The policy allows an insured some leeway to make payments in order to
respond to emergencies or to help mitigate problems. However, an insured has to
take great care in making payments that fall outside of the parameters
permitted by the company. EVEN when an insured agrees to make payments out of
his or her own pocket, he or she needs to be aware of the ramifications of such
payments. Certain actions may be interpreted as an admission of guilt or
responsibility for a loss when that interpretation may be wrong.
4.
Cooperation
The insured must cooperate with the insurer
in performing all acts required by this policy. The policy requires that an
insured work with, rather than against, the insurer in order to investigate and
process a possible claim.
5.
Notices, Demands and Legal Papers
Insureds are required to provide rapid
notification to the insurer of any communications, especially paperwork that is
related to an occurrence. Specifically, the insured must send copies of such
paperwork to the insurer as quickly as possible. Failure or significant delays
can compromise the insurance company’s ability to properly investigate and handle
a claim.
6.
Assistance With Claims And Suits
When an insurer asks, an insured must help
the company with any or all of the following:
·
To settle a claim
·
To participate with lawsuits, such as appearing at
trials and hearings
·
With their efforts to recover payments or take
other action against separate parties who may be legally responsible for
applicable injury or damage
·
With efforts to obtain and provide evidence
·
To ensure attendance of all witnesses
HOW MUCH WE PAY
1. This item makes reference to the policy’s
Personal Umbrella Liability Coverage Aggregate Limit and it states that this limit is
equal to the policy’s Personal Umbrella Liability Coverage Limit. This limit
applies to eligible incidents that are subject to an aggregate limit in the
policy’s underlying coverage. It applies to bodily injury, personal injury and
property damage that are subject to an underlying coverage aggregate limit.
This section states that the aggregate limit
applies to each, consecutive annual policy period that begins with the inception
date and that it also applies to any remaining policy period of less than 12
months. Alternately, if a last period is extended (in writing) the policy
aggregate will apply to that total, extended period.
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Example: Joan’s umbrella policy was written with an
initial policy period of 3/2/20 to 3/2/21. Her policy limit of $1 million
applies for all eligible losses that occur in that period. On 1/1/21 she
tells her insurer that she is bringing all of her policies to a common date
which will be May 1. She arranges to have her policy expiration date extended
to 5/1/21. The same $1 million limit now applies over the time period 3/2/120
to 5/1/21. |
2. The Policy Umbrella Liability Coverage Limit appears on the
declarations and it acts as the maximum possible amount that the insurer is
obligated to pay for a single occurrence (as defined by the policy) or offense
that involves bodily injury and/or property damage. This maximum obligation is
not affected by the number of persons who are insureds, the number of parties who
sustained injury or damage, the number of vehicles or crafts involved, or the
number of legal actions (claims or lawsuits). All BI and PD that is related to
the same set of accidental circumstances, or from a similar set of conditions will
be treated as a single occurrence.
If the aggregate section applies,
this item is subject to it.
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Example: Matthew is sued after, during a winter
storm, his SUV slid through an intersection and hit a car that carried four
passengers. Over a period of 7 months, he receives four separate notices of
lawsuits from the injured passengers. His umbrella policy treats all the
notices as a single claim and the Policy Umbrella Liability Coverage Limit is
the maximum amount that will apply to it provided the policy is not subject
to an aggregate. |
3. The Policy Umbrella Liability Coverage Limit appears on the
declarations and it acts as the maximum possible amount that the insurer is
obligated to pay for a single offense that involves personal injury. This maximum
obligation is not affected by the number of persons who are insureds, the
number of parties who sustained injury or the number of legal actions (claims
or lawsuits).
4. The Policy Umbrella Liability Coverage Limit is the amount to be
applied, separately, to any and all insureds. It does not increase the aggregate
amount. It also does not increase the BI and PD occurrence limit or the
personal injury offense limit.
EXCESS INSURANCE
1. Other Insurance
This insurance is excess over other insurance
that applies to the loss or claim, particularly the underlying liability coverage
required by this umbrella policy. This provision applies regardless whether the
other source or sources of protection are valid and/or collectible. However,
this condition does not apply to insurance written specifically to act as an additional
tier of coverage above this policy's limits.
This condition attempts to make any liability
protection provided by this policy act only after another source of coverage
responds to a loss. It adds that the policy will only respond to an eligible
loss that exceeds the policy’s retained limit. Such a response only takes effect
when an insured does not have a source of valid and collectible insurance
(including underlying insurance). Any response made by the umbrella policy is
subject to its separate provisions concerning primary insurance maintenance and
underlying insurer bankruptcy.
2. Failure to Maintain Underlying
Insurance
This part of the excess insurance provision
states that, should the insured not keep the applicable underlying insurance in
force, the policy will respond as if the underlying insurance, as required,
still exists and is collectible.
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Example: Elyn Nayharm has an umbrella policy that
provides coverage over her auto and homeowner policies. A month after she
replaced her standard auto policy with a specialty insurer’s minimum coverage
policy, she caused a multi-vehicle accident. The claims against her exceed
$600,000. Elyn files a claim with her umbrella insurer. The insurer tells her
that, since she didn’t maintain the underlying insurance required by the
policy, they will treat the loss as if the $500,000 underlying limit was
still available to her, even though the minimum coverage policy only offered
$25,000. |
Related Article:
Personal Umbrella Underlying Insurance Requirements
3. Bankruptcy
of Underlying Insurer
This part of the excess insurance provision
states that, should any underlying insurer become bankrupt, the policy will
respond as if that insurance was still available.
Unfortunately, not all circumstances can be
foreseen by policy conditions so there are times that insureds and insurers
will dispute how coverage is to apply.
Related Court Case: “Other
Insurance Clauses in Consecutive Policies Determined Obligation of Each
Insurer” - Although it involves a professional liability loss, it illustrates
how insurers argue other coverage and subrogation issues.
CONDITIONS
1. Appeals
This provision deals with the fact
that the company providing umbrella coverage has financial interests that may
be quite separate from those of an underlying insurer. In the instance that a
third party may be awarded damages that exceed the limits offered by an
underlying insurer and that insurer chooses not to appeal the decision, the
umbrella insurer states that it has a separate right to make an appeal on its
own. Of course, it is also obligated to handle all costs associated with an
appeal.
2. Bankruptcy of an Insured
This policy, its coverage, and the
basis of how the policy responds to the loss are not affected by an insured
whose financial situation causes him or her to file bankruptcy.
Note: The PU 0001 does not contain a separate statement regarding
cancellation and non-renewal as it relies on the use of a separate, amendatory
endorsement.
3. Change, Modification, or Waiver of Policy Terms
Only the insurance company has the
option of waiving or changing this policy’s terms and such waiver
or change must be in writing. If the insurance company providing coverage under
this policy adopts a revision that broadens coverage without additional premium,
the broadened coverage will apply to this policy as of the date the insurance
company adopts the revision in the state in which the described location is
located. This condition applies only to revisions adopted 60 days prior to or
during the policy period shown on the declarations. This condition does not apply to changes in a general program change that
both broadens and restricts coverage whether in an edition change or an
endorsement.
4. Conformity With Statute
Terms in conflict with the laws of
the state in which the mailing address shown on the declarations is located,
are changed to conform to such laws. This provision is rarely relied upon since
amendments or endorsements are added to policies to match the state where the
policy is used. However, there are instances where the condition is relied
upon.
5. Inspections
The
insurer reserves the right to inspect the property owned or controlled by an
insured and it can do so with its own personnel or it can have another
organization make an inspection on its behalf. The
condition also warns the insured that, while an inspection and related
information about the results of the inspection may imply a type of warranty or
guarantee about the fitness of the insured location, that is not an assumption
that should be made. This serves as a warning and a notice to an insured that a company inspection cannot be used as
evidence of the worthiness of the property. A company has their
own underwriting rules and philosophy for providing coverage and will not
permit its actions to be used to the benefit of other parties. This also
prevents the company from being held liable to other areas of authority
concerning the property.
6.
Legal Action Against Us
The insured is not permitted to file suit
against the insurer without, first, complying with all of the policy’s terms. Further,
such action is barred until the amount of the insured’s liability has been
determined by:
·
a final judgment against the insured as a result of
a trial, or
·
a written agreement between the insured, the
claimant, and the insurer.
Note: No person has
a right under this policy to join the insurance company or to speak for the
insurance company in actions related to determine the amount of an insured’s
liability.
7.
Maintenance of Underlying Insurance
This provision requires the insured to keep
all of the underlying coverage (as defined in the policy) in force and to keep
the policy limits at the levels originally agreed to. The insured is warned that
underlying coverage that is cancelled or which has been replaced by different
coverage (lower limits) will not affect the umbrella insurer’s coverage
obligation. The policy will only respond on the basis that the original
coverage and amounts were in place. Also, the insured is required to notify the
umbrella insurer if coverage is lost or changed.
Note: Notification
of lost or replacement coverage with lower limits does not mean that the
insurer would accept the condition; rather, it would allow the insurer to take
underwriting action (such as cancellation or non-renewal). However, reduced
coverage caused by the reduction or exhaustion of underlying aggregate limits
is not considered a failure to maintain underlying limits.
Related Article: Personal Umbrella
Underlying/Excess Insurer Issues
8. Misrepresentation, Concealment, or Fraud
Any intentional concealment or
misrepresentation on the part of any insured can void the policy for ALL
insureds. If an insured lies or hides a material fact or any circumstance that
relates to the insurance that is granted by this policy, it will cause the
insurance to not provide coverage for any insured. This may occur either before
or after any loss.
Simply put, the company should be
able to rely on the statements made by the insured in making its decision to
insure a person or, later, regarding how it handle a claim. If the statements
are seriously in error (with the insured’s knowledge), then the insurance
contract has no right to exist and the company has no obligation to honor it.
9. Policy Period
The applicable policy period
appears on the policy’s declarations.
Related Article: Personal
Umbrella Declarations Page
10. Subrogation
When an insurer pays damages, it may ask the
insured to transfer his or her right to attempt to recover damages from another
party. The insured must agree, in writing, to do so and to fully cooperate with
the insured in pursuing the recovery. This act of seeking payment from a party
responsible for a loss is called subrogation. This right is very valuable to an
insurer. In fact, if an insured damages this right to recover payment after a
loss has occurred, the insurer may no longer be obligated to pay for the loss.
The insured may waive all rights to recover
before a loss occurs—but this waiver must be in writing. Signing this waiver
BEFORE a loss does not affect coverage under the policy.
Note:
This provision could be a sticky one,
particularly when the subject of subrogation is not also being pursued by an
underlying insurer or the umbrella insurer is seeking reimbursement from an
underlying insurer. In such instances, the insured would be forced to violate a
provision of either the underlying or excess insurer.
11.
Transfer of Your Rights and Duties under This Policy
No insured or other party can sign
this policy and its coverages over for use by any other party unless, first,
getting the insurance company’s permission (in writing).
If the named insured or the named
insured’s in-resident spouse dies, the legal representative of the person who
died becomes an insured as respect to the deceased insured’s premises and
property but only for the coverage provided by the policy at the time of that
person’s death.
Note: Recognizing that the status of the residents in the household change in
the policy once the named insured or spouse die, the definition of insured is
changed for the time of transition following the death. The definition of
insured is expanded to include members of the deceased person’s household who
were members at the time of death but only while residing at the described
premises. In addition, if a person is granted temporary custody of the covered
property belonging to the deceased, that person is an insured but only for that
property and only until a legal representative is appointed.