Umbrella and Excess Liability Towers
What this clause says
Borrower shall maintain umbrella or excess liability coverage with limits of not less than $10,000,000 per occurrence in excess of the primary general liability, professional liability, automobile liability, and employers liability policies.
What this actually means
An umbrella or excess policy sits above the primary layers and pays after they are exhausted. In senior care the tower is often built from several layers stacked by different markets, because few single markets will put out a large limit on this class alone. Each layer has its own wording, and the layers do not automatically match.
What it means for an operator
Two failure modes matter. The first is following form: an excess layer is supposed to follow the terms of the layer below, and where it does not, you can have coverage at $1M that disappears at $5M for the same claim. Abuse coverage is the usual casualty, because an excess market will often decline to follow a sublimited abuse grant. The second is exhaustion: if your primary erodes by defense and the excess requires exhaustion by payment of damages, there is a real argument about whether the excess ever attaches. Ask for a tower schedule showing each layer, its market, its attachment point, and any wording that departs from the layer below.
How this evaluates
The Policy Checker applies these rules in order; the first match wins.
umbrella limit is at least $10M -> Compliant: A tower at this level is consistent with what larger lenders and landlords typically require. Confirm each layer follows form, particularly on abuse. umbrella limit is at least $5M -> Borderline: This is a common tower size, but many HUD-insured and institutional landlord requirements start at a higher figure. Check the actual requirement in your loan or lease documents. umbrella limit is not set -> Gap: No umbrella or excess recorded. In a class exposed to nuclear verdicts, a primary limit alone is rarely a defensible structure and is usually below lender and landlord requirements.
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Common questions about this clause
- Does my excess policy follow form over abuse coverage?
- What is a quota share layer in a senior care excess tower?
- What insurance does a senior housing REIT lease usually require?
- How should a senior care operator size limits against nuclear verdicts?
- Does a commercial umbrella sit over senior care professional liability?