{"id":6328,"date":"2019-10-01T00:00:23","date_gmt":"2019-10-01T00:00:23","guid":{"rendered":"https:\/\/todaysveterinarybusiness.com\/?p=6328"},"modified":"2022-06-15T17:44:57","modified_gmt":"2022-06-15T17:44:57","slug":"extra-extra","status":"publish","type":"post","link":"https:\/\/navc.sitepreview.app\/todaysveterinarybusiness.com\/extra-extra\/","title":{"rendered":"Extra! Extra!"},"content":{"rendered":"

The number of lawsuits filed and monetary awards handed out have increased in today\u2019s litigious society. As a result, coverage limits in standard commercial general liability policies \u2014 typically $1 million per occurrence and $2 million in annual aggregate \u2014 are often insufficient for modern veterinary practices.<\/p>\n

Your liability related to the transmission of zoonotic diseases, the use of employees\u2019 personal vehicles<\/a> on company business and an injury to clients inside your hospital are examples of events that can easily exceed standard primary insurance limits. Additional financial protection against large claims such as these is where an excess liability policy comes into play.<\/p>\n

What It Is<\/h3>\n

Often called an umbrella policy, an excess liability policy provides additional coverage over one or more underlying business liability policies. Excess liability policies are typically provided in increments of $1 million per occurrence.\u00a0 They serve three primary purposes:<\/p>\n

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  1. Coverage in excess of the underlying limits.\u00a0Example: An employee has an at-fault auto accident while driving a personal vehicle on company business. Multiple people are injured, resulting in a total settlement of $1.5 million. The excess policy will pay $500,000 beyond the $1 million occurrence limit in the primary liability policy.<\/li>\n
  2. Drop-down primary coverage when the underlying policy\u2019s aggregate limits have been exhausted.\u00a0Example: Two liability claims totaling $1 million are paid out in a policy year, exhausting the primary liability policy\u2019s aggregate limit. A $200,000 claim then occurs in the same policy period. The excess liability policy will \u201cdrop down\u201d and provide primary coverage to pay the claim.<\/li>\n
  3. Broader coverage than the existing underlying coverage.\u00a0Example: A certain claim is not covered by the primary liability policy. However, the excess liability policy has broader coverage that includes such a claim. Again, the excess liability policy will drop down and provide primary coverage.<\/li>\n<\/ol>\n

    Three Types<\/h3>\n

    You will find three main kinds of excess liability policies: following form, excess liability and commercial umbrella. Let\u2019s summarize each.<\/p>\n

    FOLLOWING FORM<\/strong><\/p>\n