An Umbrella Liability policy provides additional third party liability limits over and above the primary limits on your Auto Liability, Commercial General Liability and Employers Liability (Coverage B of your Workers' Compensation policy) policies. It can also provide limits excess of a Foreign Liability policy if you purchase this coverage for operations outside the U.S. A well written Umbrella Liability policy can also drop down and provide coverage excess of a small retention for claims for which there is no underlying liability coverage. Commercial Umbrella Liability policies are written with limits of $1,000,000 and higher, in increments of $1,000,000. Many small funds purchase limits of $2,000,000 to $5,000,000 depending on their lease requirements. Many larger funds purchase limits of $25,000,0000 and up. The cost of an Umbrella Liability policy is roughly $1,000 for every $1,000,000 of coverage.
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If we have quoted your primary Auto Liability, Commercial General Liability, and Employers Liability (Workers' Compensation) policies then we already have everything we need to quote an Umbrella Liability policy for your hedge fund. Otherwise we will require the following information:
- Copies of your primary third party liability policies:
- Auto Liability
- Commercial General Liability
- Employers Liability (Workers' Compensation)
- Foreign Liability (if applicable)
- Insurance carrier loss data (“Loss Runs”, which are computer printouts from your current/prior insurance carriers showing your claims history - three years minimum/five years if available) - with a description of any loss in excess of $25,000
Hedge Fund Insurance, a division of Frenkel & Co., Inc., has access to every major market in the U.S., London, and Bermuda. As brokers, we represent the policyholder and not the insurance company. Among the largest brokers in the country as ranked by
Business Insurance magazine, we have the market clout necessary to get you the best possible price. Some of the markets we place Umbrella Liability Policies with include:
- AIG
- Chubb
- CNA
- Fireman's Fund
- Hanover
- Hartford
- Tower
- Travelers
- Zurich
Umbrella Liability policies cost roughly $1,000 per million of coverage. The first million of coverage may cost a little more, and additional limits, purchased in increments of $1,000,000, may cost a little less. Of course, Hedge Fund Insurance will provide you with a complete proposal, including the exact annual premium, once we better understand your risk and have had a chance to present your account to underwriters.
Hedge Funds typically have a very low freqency of Umbrella Liability claims. The most likely scenarios include:
- An employee negligently starts a fire in your office causing substantial property damage to other tenants in the building. Lawsuits filed by the tenants include demands for damages totaling $2,500,000.
- Your firm sponsors an event and an accident seriously injures a dozen invited guests. Claims for medical costs and non-economic damages total $20,000,000.
- A junior analyst attending an out-of-state conference rents a car at the airport. That night he goes to a bar and while driving back to his hotel, collides with a another vehicle carrying a family of five, including a noted neurosurgeon, killing three of the five passengers. Your firm is sued by the relatives of the deceased for $10,000,000.
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