Will My Umbrella
Cover Pollution?
Not if nothing underneath it does. An umbrella inherits the shape of the policy below it. It adds height, not width.
We shop your septic business with carriers like
The longer answer
With the sources, so you can check us.
The carve-back is conditional
The standard umbrella form excludes pollution, then says the exclusion “does not apply if valid ‘underlying insurance’ for the pollution liability risks described above exists or would have existed but for the exhaustion of underlying limits.”
And where it applies, it follows the underlying
The same form provides that the coverage “will follow the same provisions, exclusions and limitations that are contained in the applicable ‘underlying insurance’.” An umbrella cannot be broader than what sits beneath it.
So both carriers deny together
Insurance reference IRMI walks through exactly this: a policyholder sued for property damage the general liability insurer calls pollution, where the umbrella insurer “follows the terms of the underlying CGL… and takes the same coverage position—and both refuse to defend.”
The right order
Put contractors pollution liability in place, schedule it as underlying, then build height above it. A five million dollar umbrella over a policy that excludes septage buys nothing for septage.
Sources: IRMI, commercial umbrella and exhaustion of the underlying insurance
What this means for your business
- The standard umbrella form excludes pollution, then says the exclusion “does not apply if valid ‘underlying insurance’ for the pollution liability risks described above exists or would have existed but for the exhaustion of underlying limits.”
- The same form provides that the coverage “will follow the same provisions, exclusions and limitations that are contained in the applicable ‘underlying insurance’.” An umbrella cannot be broader than what sits beneath it.
- Insurance reference IRMI walks through exactly this: a policyholder sued for property damage the general liability insurer calls pollution, where the umbrella insurer “follows the terms of the underlying CGL… and takes the same coverage position—and both refuse to defend.”
- Put contractors pollution liability in place, schedule it as underlying, then build height above it. A five million dollar umbrella over a policy that excludes septage buys nothing for septage.
Answered by Septic Cleaning Insurance Group
We only write this trade, and we read the policy before we sell it. More on the operations we insure and the coverage behind them.
Straight answers, no insurance-speak
Contractors pollution liability as a scheduled underlying policy, then excess limits above it. Underlying first, height second. Reversing that order produces a certificate that looks impressive and pays nothing.
Over employers liability, yes, where that is scheduled as underlying. Not over statutory workers compensation benefits, which the standard umbrella form excludes outright with no carve-back.
The umbrella does not become invalid, but it applies as if the underlying insurance were still in full effect. It starts where the required underlying limit would have ended, and you fund the gap personally.
Possibly not. These answers describe standard forms and common rules; your policy may carry endorsements that change the result either way. Send the declarations and endorsement schedule and we will tell you what your form does.
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Send the declarations and endorsements. We will tell you what your form does, not what a standard form does.
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