Glossary

The term lead umbrella refers to the first umbrella policy in a multilayer excess program that sits directly over the primary policies. Typically, higher-level excess policies sitting above the lead umbrella in this type of placement contain follow-form provisions making them follow the "lead" of the terms and conditions of the first underlying umbrella.

Liability insurance is a form of insurance that applies to the obligation of the insured to pay damages arising out of legal liability to others.

Layering is the building of a program of insurance coverage using the excess of loss approach. Layered programs involve a series of insurers writing coverage, each one in excess of lower limits written by other insurers. Umbrella liability coverage is frequently structured in this manner, whereby a number of umbrella insurers write coverage at various levels, on an excess of loss basis, ultimately providing an insured with a high total limit of coverage.

A liberalization clause is a provision that extends to persons already insured under a particular policy the broadened coverage features that may be introduced in subsequent editions of that policy form. In umbrella liability insurance, a clause specifying that coverage will be as broad as that provided by the primary liability policies.