The excess that cannot be reached

An operator carrying a primary limit and a five million dollar tower above it believes it has six million available for a catastrophic resident injury. Sometimes that is true. Often it is not, and the reason is two clauses that nobody reads at renewal because neither appears on the one-page proposal everyone reads instead.

Clause one: what the excess actually follows

A commercial umbrella follows general liability, auto and employers liability. It typically carries an exclusion for professional services, medical services, or the rendering or failure to render professional care.

In senior care, professional services is where essentially all the severity lives. A resident injury pleaded as a failure of assessment, care planning or supervision is a professional liability claim. So an unmodified umbrella sitting over a senior care program provides a large amount of limit for a delivery van and very little for the exposure that could end the business.

Checking this takes five minutes. Open the umbrella and find the schedule of underlying insurance. Every policy you expect it to sit over has to be listed by carrier, policy number, limit and period. If the professional liability policy is not on that schedule, it is not underlying, whatever anyone believes. Then find the exclusions and look for professional services. If one is present with no carve-back, the exposure is not covered no matter what the schedule says.

The right structure in this class is usually not an umbrella at all. It is a follow-form excess written specifically over the combined general and professional program, adopting the primary wording, including how the primary treats defense costs and how it treats abuse. Follow-form matters here precisely because those two provisions are the ones a non-follow-form excess is most likely to handle differently, and they are the two that decide the claims that reach a tower.

Clause two: when it attaches

This is the more subtle one and it produces a gap that operators fund without ever being told it exists.

Read the attachment language. The dangerous formulation is that the excess attaches after the underlying insurers have paid the full underlying limit as damages. That phrasing does not count defense costs.

Now combine it with the fact that most senior care primary policies are written with defense inside the limit. A claim consumes four hundred thousand in defense and six hundred thousand in settlement. The primary is exhausted; it has paid its full limit. But it has not paid a full limit in damages, so on that wording the excess has not attached, and the difference is a gap the operator funds.

The fix is a phrase: attachment on exhaustion of the underlying limit by payment of damages and claim expenses. Ask for it, get it in the specimen rather than in a proposal, and confirm it on every layer rather than on the first excess alone.

Why layer-by-layer matters now

Senior care severity has outrun the limit any single market will deploy on one account. Towers that were built from three carriers in three layers are now assembled from eight or ten participations, with individual layers split among several carriers on a quota share basis.

That changes what checking means. Follow-form status, attachment language and defense treatment all have to be confirmed per participation, not per tower, because a layer where three quarters of the limit follows the primary treatment of abuse and one quarter does not will produce a partial recovery on exactly the claim that got there.

It also changes what a renewal is. A tower with ten participations has ten renewal decisions. One participant leaving does not collapse the program, but it does open a hole to be refilled at whatever the market charges that year, which makes the year-over-year cost less predictable than the headline rate change suggests.

The one page to ask for

Ask your broker for the tower on a single page: every participant, its share, its layer, its attachment point, its form, and whether it follows the primary on defense and on abuse.

If that page does not exist, it is worth asking why, because the broker who assembled the tower is the only party in the transaction who can see the whole of it. And if it does exist, read the attachment column first. It is the shortest column and the most expensive one.