Media attention given to litigation costs involving pharmaceuticals, asbestos and similar products makes it important to be aware of the amount of defense coverage provided in multi-layered umbrella liability insurance programs.

Some excess umbrella insurance policies state that they exactly follow the terms of the "governing" underlying policy, and do not contain any exceptions to this statement. This is the ideal form for an excess umbrella policy. Unfortunately, not all insurance-company-developed forms take this approach. Instead, most state that they follow the terms of the governing underlying policy, but then go on to recite a list of exceptions.

One common exception involves defense. Many excess umbrella policies state that the insurer cannot be called upon to actually provide a defense. However, they include the cost of defense as a reimbursable item, along with indemnity costs. Thus, the policy limit can be applied toward any combination of indemnity and defense.