Umbrella and Excess Liability Insurance in Texas

Read the Limit Requirement Twice

"$2,000,000 total limits" and "$2,000,000 umbrella over $1,000,000 primary" are different amounts of insurance. The first adds up to $2,000,000, so $1,000,000 of primary with $1,000,000 above it reaches it. The second asks for $2,000,000 on top of $1,000,000, which is $3,000,000 in all. The exhibit's exact wording decides which one you're buying, so read it before anyone quotes.

When It Comes Up

It comes up when a contract's insurance exhibit asks for more liability limit than your policies carry. The exhibit sets how much, and whether it says umbrella or excess; the limit wording above is the first thing to check.

What I Need to Quote It, and Why

To quote umbrella or excess coverage, I'll ask for two things: the declarations pages of the policies it would sit over, and your loss runs.

• The declarations pages. An umbrella or excess policy attaches above specific underlying limits. Without knowing those limits, there's no attachment point to write it to.
• The loss runs. Past claims are the evidence for the chance of a claim exceeding those limits.

Employers Liability When You Don't Carry Texas Comp

If you don't carry Texas workers' compensation, you have no comp policy to list when an umbrella or excess quote asks for employers liability underneath. Under Labor Code § 406.002(a), "Except for public employers and as otherwise provided by law, an employer may elect to obtain workers' compensation insurance coverage."

TDI regulates a separate product for an employer without comp, "Employers Indemnity (Including Employers Liability) for Non-Subscribers to Workers Compensation Act," whose forms may "reimburse or pay on behalf of the insured employer who has opted out of the workers compensation system for sums that the employer must legally pay as damages because of bodily injury to the employer's employees." Whether an umbrella or excess carrier accepts that policy underneath is the underwriter's decision, not a rule.

The exposure behind it is in § 406.033(a): when an employee not covered by workers' compensation sues, "it is not a defense" that the employee was contributorily negligent, assumed the risk, or was hurt by a fellow employee's negligence.

Sources: Tex. Labor Code § 406.002 · TDI, Review Requirements Checklist – Employers Indemnity · Tex. Labor Code § 406.033

Ask for Your Claims History the Day the Contract Arrives

Your carriers have up to 30 days to send your claims history, and the clock starts when they receive a written request. On written request, a property and casualty insurer "shall provide the policyholder with a list of claims charged against the policy and payments made on each claim" under Insurance Code § 542.102, "not later than the 30th day after the date the insurer receives the request" under § 542.103.

Workers' compensation has its own section: on written request, a comp carrier must provide "a list of: (A) claims charged against the policy; and (B) payments made and reserves established on each claim," plus "a statement explaining the effect of claims on premium rates," and it has the same 30 days under § 2051.151(c)–(d).

Sources: Tex. Ins. Code § 542.102 · Tex. Ins. Code § 542.103 · Tex. Ins. Code § 2051.151

A Per-Project Aggregate Answers a Different Question

When the concern is one general aggregate shared across every job you run, ISO endorsement CG 25 03, Designated Construction Project(s) General Aggregate Limit, is a different tool from added limits: its title names what it changes, the general aggregate, by designated construction project. Whether a contract accepts it in place of umbrella or excess limits is in the exhibit's wording.