Claims: what typically happens in severe liability cases

• High dollar stakes: medical costs, lost income, and future care can push damages into seven figures quickly.
• Long-term consequences: injuries may affect earning capacity and quality of life for decades.
• Multiple decision-makers: attorneys, excess carriers, reinsurers, and sometimes courts all become involved.

When potential damages are large, every decision becomes strategic—and every step slows down.

• Claim triage: carriers quickly assess whether injuries or damages could exceed primary limits.
• Defense counsel assignment: specialized attorneys are appointed early in high-exposure cases.
• Evidence preservation: statements, photos, logs, contracts, and incident reports become critical.
• Excess carrier notice: umbrella or excess insurers are often notified long before they pay anything.

Early notice to umbrella carriers is procedural, not accusatory—it preserves rights and coordination if the case escalates.

Severe claims start with preparation, not negotiation.

• Medical stabilization: attorneys often wait until injuries and long-term outcomes are clearer.
• Discovery: depositions, expert reports, and document production can take months—or years.
• Liability analysis: fault may be disputed, shared, or influenced by contracts and indemnity clauses.
• Damages modeling: future medical care, wage loss, and life-care plans require expert input.

Fast settlements are rare when future damages are unknown. Time reduces uncertainty—and uncertainty drives value.

In severe claims, delay is often a feature, not a failure.

• Primary limits first: underlying policies are typically exhausted before umbrella funds are considered.
• Mediation: formal mediation is common once liability and damages are better understood.
• Policy stacking: multiple policies, entities, or years of coverage may contribute.
• Consent requirements: umbrella carriers often must approve settlements that touch their layer.

Settlement value reflects risk—not just what happened, but what could be proven at trial.

• Excess protection: umbrellas pay after primary limits are exhausted, not alongside them.
• Broader defense perspective: umbrella carriers monitor defense strategy early to protect their layer.
• Catastrophic buffer: they prevent a single verdict from threatening the business’s survival.

Some umbrellas may also “drop down” in limited circumstances—but this depends on policy language and exclusions.

Umbrella insurance exists for the cases you hope never happen—and can’t self-fund if they do.

• Loss of control: attorneys and insurers lead decisions, not the business owner.
• Long silence: months can pass with little visible progress.
• Existential risk: outcomes can affect reputation, finances, and future operations.

Severity claims aren’t just bigger—they’re heavier.

• Carry adequate limits: align primary and umbrella limits with real-world verdict trends.
• Contract review: understand indemnity and additional insured obligations.
• Incident protocols: train staff on reporting, documentation, and escalation.
• Annual reviews: growth, new operations, and new contracts change exposure.

Umbrella insurance works best when it’s never tested—but ready when it is.

How long do severe liability claims usually take?
One to three years is common, and complex cases can take longer—especially if they approach trial.

Will my umbrella carrier control the claim?
Primary carriers typically control defense, but umbrella carriers closely monitor and may influence strategy as exposure grows.

Does a large claim automatically mean a lawsuit?
Not always, but severe injuries or damages make litigation more likely due to the stakes involved.