Masonry Magazine June 1965 Page. 9
WHAT ARE "ADEQUATE" LIMITS OF LIABILITY
Insurance people are often requested to determine exactly what limits of liability are adequate for a given risk, an impossible task. At best, we can recommend minimum levels consistent with those carried by a majority of contractors doing similar work. The required limit depends, finally, on how much actual or potential risk the insured chooses to insure and how much he is willing to retain himself.
Theoretically, the maximum requirement is limited only by the solvency of the insured, and to be properly covered, he would require limits equal to at least the total amount of his assets. Certainly, this is not practical, but most firms of standing decide in favor of conservatism; that is, high enough limits to protect against a catastrophe loss, often with a deductible or self-insured layer below to reduce overall premiums. In short, forget about insuring towing losses which can be paid out of petty cash; do buy coverage for major losses which threaten your entire business future.
The current cost of increased limits of liability is as follows:
To Increase From General Liability $100/300,000 Bodily Injury
% Premium Increase
| To | Operations Premises Hazards | Other + Flat Charge |
| -------------- | ---------------------------- | ------------------- |
| 300/300,000 | +5% | +4% |
| 250/500,000 | 8% | 6% |
| 300/500,000 | 9% | 615% |
| 500/500,000 | 11% | 9% |
| 500/1,000,000 | 19% | 15% |
| 000/1,000,000 | 24% | 20% |
| 500/2,000,000 | 32% | 27% |
To Increase From $50/50,000 Property Damage
% Premium Increase
| To | |
| -------------- | ------------ |
| 100/100,000 | +4% |
| 100/200,000 | 7% |
| 100/300,000 | 834% |
| 100/500,000 | 11% |
| 250/500,000 | 22% |
| 50/1,000,000 | 26% |
| 500/500,000 | 35% |
Automobile Liability
To Increase From $100/300,000 Bodily Injury
| To | Premium Increase |
| --------------- | ---------------- |
| 300/300,000 | +4% |
| 250/500,000 | 6% |
| 300/500,000 | 7% |
| 500/500,000 | 10% |
| 500/1,000,000 | 13% |
| 500/2,000,000 | 17% |
| 1,000/1,000,000 | 21% |
To Increase From $10,000 Property Damage
| To | Premium Increase |
| --------- | ---------------- |
| 25,000 | +9% |
| 50,000 | 14% |
| 100,000 | 18% |
| 500,000 | 32% |
MASONRY
June, 1965
UMBRELLA EXCESS LIABILITY
More and more insurance buyers have found an answer to the limits problem in a form of excess limits insurance first called Umbrella Excess Liability and underwritten by Lloyd's of London, now also available through domestic carriers under similar names. High enough limits are available under this form to eliminate, for all practical purposes, the question of adequacy in the amount of insurance carried.
There is little standard about these forms and only a specific quotation can provide a complete explanation of hazards insured and exclusions or limitations applicable. In general, these policies operate in two ways:
A-Excess Over Existing Primary Insurance
Existing Liability Insurance Policies are not eliminated with the purchase of Umbrella Coverage. Rather, they become the underlying layer, above which Umbrella provides excess limits for the same hazards insured under primary policies, subject to a high limit per occurrence.
Example
A contractor insured for $100,000 each person, $300,000 each accident Bodily Injury Liability purchased a $1,000,000 Umbrella Excess Liability and was subsequently sued for $750,000 for injury to one person as a result of an accident. The ultimate judgment was $500,000, whereupon the primary carrier paid to the full limit of its policy and Umbrella paid the remaining $400,000.
B-Excess Over Self-Insured Hazards
For hazards not insured in existing Liability Insurance Policies, Umbrella provides coverage in excess of a self-insured retention or deductible, usually $25,000 per occurrence. Such exposures may include:
"Care, Custody or Controll"
Property Damage Liability
Blanket Contractual Liability
Occurrence Bodily Injury and Property Damage Liability
World Wide Coverage
Products Completed Operations Liability
Personal Injury Liability
Automobile Liability
Professional or Malpractice Liability
Liquor Law Liability
Advertiser's Liability
Aircraft Non-Ownership Liability
Non-Owned Watercraft Liability
Employers' Liability
Even where the premium volume for Casualty Insurance at lower limits is relatively small, it would be well to secure a quotation for this broad coverage. It is often available for less cost than would be charged for higher limits under policies providing far less protection. Because so much is automatically included in (continued on page 29)