Group Umbrella Insurance or Group Excess Insurance Policies – Why your company should have one
Umbrella insurance policies are a very necessary and very popular means of extending your personal liability insurance coverage above and beyond what is provided in a standard policy, but “Group Umbrella Insurance Policies” also known as Group Excess Insurance Policies, are also becoming more common within companies with high-income executive teams. The official name, Group Personal Excess Liability Insurance, is a comprehensive benefit for key personnel, managers, and employees, which protects affluent lifestyles from risk, yet in a very affordable way. Group Excess Insurance or Group Umbrella Insurance policies will extend the individual employee and owner of the company's personal and auto liability coverage worldwide to include boats, youthful drivers, spouses and dependents living within the household, directors and officers insurance (in the event your company executives are serving on non-profit boards), employer liability for domestic employee, and more. The advantage to having a Group Umbrella policy is that the individually insured are able to achieve greater coverage, at a lower cost, and the policies are easier to underwrite as each individual’s level of risk is not as closely evaluated. Group Personal Excess Liability Insurance or Group Umbrella Insurance is a true “group” policy; the insurance company will not individually underwrite or decline any individual in the designated group. Think of it like this: you buy group health insurance to take advantage of the savings over purchasing health insurance on your own, so why wouldn't you want to do the same for an umbrella insurance policy? Group Umbrella Insurance policies extend the limits of personal risk for those high-income earners on a more affordable basis than when purchasing those umbrella insurance policies individually.
The limits for these policies can be quite high. A company could effectively secure up to a $50 million umbrella policy for their high-net worth executives. The mechanics of it are familiar: The company buys the policy similarly to an employee benefit plan and charges it back to the employees proportionately.
While Group Excess Insurance policies are more popular among the highly-compensated, the same group policies are available at lower limits which are more suitable for other levels of employees. (Employees can also “purchase up” to suit their individual needs.) Enrollment can be voluntary and new employees do not have to endure a waiting period, they can be automatically covered from the date they were hired or promoted. The group personal excess policies have been purchased by banks, law firms and insurance companies in the country and regionally. For more information, call for details.
Author Note: Chris Peterie is a principle of Swingle Collins & Associates.