What is a common exclusion in excess and umbrella policies?

Pollution liability is frequently a common exclusion in excess and umbrella policies. These policies are designed to provide additional coverage beyond the limits of underlying policies and often include exclusions that are considered high-risk or that would otherwise result in disproportionately high payouts.

Pollution liability relates to damages arising from pollution, contamination, or environmental damage, which can lead to significant legal and financial repercussions. Because claims for pollution can encompass lengthy litigation and substantial settlements, insurers often choose to exclude these risks from excess and umbrella policies to mitigate their exposure to significant losses.

Exemption from pollution liability can also reflect the specialized nature of environmental coverages, which are typically addressed through distinct environmental insurance policies or endorsements. Therefore, businesses looking for comprehensive coverage may need to consider those specific policies if they face pollution risks.

Understanding these common exclusions is crucial for insurance agents and clients alike to ensure all potential risks are adequately addressed within their overall insurance program.