Nearly all umbrella policies are issued with one or more endorsements attached. The endorsements limit, modify, expand, or clarify the coverage provided by the basic policy form. Because the risks being underwritten for insureds vary considerably, the number and type of endorsements issued also varies. In some cases, a particular endorsement, such as a nuclear energy liability exclusion, is attached to all policies written by a particular insurer, regardless of the insured's operations. In other cases, the endorsements may be issued because of the nature of the risk or the scope of coverage provided by underlying insurance.

With a few exceptions, there are no standard umbrella endorsements. However, for certain groups of known risks, specialty endorsements have been developed by the Insurance Services Office (ISO) for optional use by umbrella insurers. These specialty endorsements may be attached to policies issued to certain classes of risks, such as contractors, financial institutions, oil and gas companies, or public entities.

There is also a wide variety of endorsements designed by underwriters to specifically limit, expand, or clarify coverage for a particular exposure. The most common of these so-called “wildcat” endorsements include the following:

• “Following-form” endorsements: modify coverage to conform with coverage provided by underlying policies. These endorsements may apply to specific coverages, such as contractual liability or watercraft liability, or may be applicable to all coverages provided by underlying policies. An example of an endorsement that limits coverage for contractually-assumed personal injury to that provided by underlying insurance follows:

The following exclusion is added to Section IV – Exclusions:

Any liability imposed by low, or assumed by any “Insured” under an “Insured contract,” because of “personal injury,” except to the extent that such insurance is provided by a policy listed in the Schedule of Underlying Insurance, and for no broader coverage than is provided by such policy.

Great American Ins. Co., GAI 6129 (Ed. 06.97)

• Pollution endorsements: usually preclude or modify coverage for pollution-related claims even if pollution coverage is included or excluded in underlying policies. In some cases, pollution endorsements may provide limited coverage under the umbrella even if underlying liability policies exclude such coverage. An example of a total pollution exclusion endorsement follows:

This insurance does not apply to:

(1) “Bodily injury” or “property damage” which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants or escape of “pollutants” at any time; or

(2) “Pollution cost expense”.

Westchester Fire Ins. Co., CU 21 25 12 01 (ISO)

• Real and personal property exclusion: precludes coverage for real and personal property in the insured's care, custody, or control even if coverage is provided by underlying insurance, as evidenced by the following example:

This policy does not apply to any liability arising out of damage to or loss of use of real and personal property of others in the care, custody or control of any Insured.

Fireman's Fund Ins. Co., 178724 10-03

• Professional liability or services exclusion: precludes coverage for the insured's professional liability. This exposure is typically insured under an errors and omissions policy. The following is an example of a professional services exclusion:

With respect to any professional services listed in the Schedule, the following exclusion is added to Paragraph 2. Exclusions of SECTION 1 – COVERAGES:

2. Exclusions

This insurance does not apply to:

Professional Services

Any liability, damages, loss, injury, demand, claim or “suit” arising out the rendering of or failure to render the professional services by you or on your behalf.

Liberty Mutual Ins. Co., LCU 21 24 11 10

• Exclusions applicable to specific coverage(s): exclude coverage for personal injury, advertising injury, auto liability, or other coverages even if such coverages may be provided by underlying insurance. An example of this type of exclusion follows:

Cross Liability Exclusion

This insurance does not apply to Bodily Injury, Property Damage, Personal Injury or Advertising Injury to a Named Insured caused by any other Named Insured.

Travelers, SU023 Ed. 10-02

Whenever endorsements are attached to an umbrella policy, it is important to do the following:

1. Carefully evaluate the wording of all endorsements in light of the coverage they modify. Since umbrella policies are often purchased to fill coverage gaps in underlying policies, endorsements may overly restrict the umbrella's coverage.

2. Do not assume the absence of an exclusionary endorsement on one umbrella means the policy provides broader coverage than an umbrella that does not have the endorsement. The policy without the endorsement may contain an exclusion in the basic form that makes an exclusionary endorsement unnecessary.

3. Do not assume the effect on coverage from the title of an endorsement. Endorsements bearing the same title are often worded differently and have differing effects on coverage.

4. Make sure the wording of exclusionary endorsements is drafted as narrowly as possible. Underwriters often generalize with broad blanket exclusions. Concerned about a specific exposure, they may exclude more coverage than is necessary or actually intended. Blanket exclusions should be avoided whenever possible.

5. Evaluate following-form endorsements carefully in light of coverage provided by underlying policies. Such endorsements may broaden some coverage(s) provided by the umbrella, but also may result in the narrowing of other umbrella coverages. Where necessary, the wording of following-form endorsements should be modified so that all coverage provided by the umbrella are at least as broad as the coverages provided by underlying insurance.

Because even endorsements that appear to be irrelevant may contain wording that adversely affects coverage, the wording of all umbrella endorsements should be carefully reviewed. Any endorsement that is inappropriate for a particular insured should be removed whenever possible.