The Insurance Services Office (ISO) Commercial Liability Umbrella is a stand-alone coverage form that contains its own coverage, exclusions, and conditions. It provides excess limits over General Liability, Automobile Liability, Employers Liability, and other underlying liability coverage forms or policies.
In addition, and because it is a stand-alone coverage form, it may include coverage that underlying coverage forms or policies do not include or provide.
ISO COMMERCIAL LIABILITY UMBRELLA COVERAGE FORM
This coverage form assumes that underlying coverage is written on an occurrence basis. If an underlying coverage form or policy is written on a claims-made basis, an endorsement can be added to make it work with the claims-made coverage. One of its unique features as it relates to claims-made coverage is that the claims-made coverage’s retroactive date is not listed on the umbrella declarations but follows the retroactive date that applies to the underlying coverage instead.
This coverage form’s eligibility criteria are very broad and apply to all commercial exposures. However, its eligibility has some limitations with respect to its use with farm operations.
The ISO Commercial Liability Umbrella Policy includes the following ISO forms:
- IL DS 00-Common Policy Declarations
- IL 00 17-Common Policy Conditions. This form contains the conditions common to most commercial insurance coverage forms and is mandatory for use with most ISO monoline or multi-line simplified policies.
- CU DS 01-Commercial Liability Umbrella Declarations
- CU 00 01-Commercial Liability Umbrella Coverage Form
- Policy Cover Page or Jacket. Individual insurance companies design this form for their own purposes. They may include a table of contents or index to meet the requirements of some states.
A number and variety of endorsements are available to modify and tailor the ISO Commercial Liability Umbrella Coverage Form. Some endorsements are mandatory and required for specific classifications and types of business. Others are optional and permit customizing a standard form to match a specific risk’s coverage requirements.
Endorsements broaden, restrict, delete, modify, or add coverage. It is important to match the umbrella endorsements with the corresponding underlying coverage endorsements in order to prevent gaps in coverage.
ISO revised the Commercial Umbrella policy in 04 13. Some very significant changes occurred that could reduce coverage for some insureds. Many of the changes were characterized as clarifications but these clarifications are often introduced because a lawsuit provided coverage where ISO thought there was none.
Underwriting umbrellas must be done rather quickly in many cases because it is usually placed after coverage for other lines of insurance has been arranged. However, it must also be done thoroughly because of the limits involved. One of the most important parts of underwriting an umbrella may be to determine the acceptability of the underlying insurance company or companies.
Rating umbrellas is often more art than science. ISO provides rating guidelines and recommendations but does not provide a filed rating technique.