The Michigan Court of Appeals recently affirmed that an umbrella policy does not cover primary insurance policies unless those policies are specifically listed in the schedule of underlying insurance.
The case involved a workers’ compensation claim insured by Traveler’s Insurance Company under a commercial general liability (CGL) policy, a workers’ compensation and employer’s liability policy (WC/EL) and an umbrella WC/EL policy. U.S. Fire Insurance Company issued an umbrella policy listing Traveler’s CGL and the primary WC/EL policy, but not the umbrella WC/EL.
Because the worker’s claim was settled under Traveler’s umbrella WC/EL policy, which was not listed in the U.S. Fire policy schedule, U.S. Fire’s policy did not apply.
Advice: Review your policies regularly to see how they work together. Finding problems like this early is better than discovering a nasty surprise later.