When the basic liability limits provided by a policy are insufficient for an insured needs, two coverage forms are used in Florida to provide the additional insurance amounts needed – umbrellas and excess liability policies.
Both add their coverage limits to those provided by the underlying coverages. So if an insured bought a $1 million dollar umbrella policy to be excess over a $500k auto policy, the total limits available would be $1.5 million.
Excess Liability Policies in Florida
There are two basic types of excess liability policies: follow form and stand-alone. Both require underlying policies to be in effect and neither will provide coverage for any risk not covered by the underlying coverage.
A follow form provides the same exact coverages, provisions, exclusions, insureds, etc as the underlying policy. Thus, if the Florida auto policy covers it, so does the follow form liability. This make it easy to underwrite and usually it is more affordable than other excess liability forms.
Stand alone policies also provide only the same coverages as the underlying policies, but each form does so on its own terms. For example, the stand alone will only cover auto exposures if there is an underlying auto policy, but it will have its own auto exclusions and limitations. Thus, there is no guarantee that if the underlying policy covers your claim that the stand alone excess policy will.
An umbrella form operates much like a stand alone policy, except it will often provide coverages not included in the underlying policy. These additional coverages may include non-owned aircraft or watercraft; property in care, custody and control; personal injury; worldwide premises liability; limited pollution; professional; and product recall.
Whenever a claim involves an underlying policy, the umbrella responds just as if it were a stand alone excess policy.