Underlying schedules and attachment points
Commercial umbrella insurance is designed to provide additional limits above your primary policies—but only when the structure underneath it is built correctly. Many claim surprises occur not because an umbrella “failed,” but because the underlying limits, schedules, or attachment points didn’t align with how the loss actually occurred.
This article explains how umbrellas attach, why underlying schedules matter, and how gaps can quietly form when policies don’t line up—especially across general liability, auto, employers liability, and project-specific requirements.
What an umbrella policy actually does
An umbrella policy provides excess limits above scheduled underlying insurance—after those policies are exhausted.
- Excess limits: adds capacity above primary policies like GL, auto, and employers liability.
- Triggered by exhaustion: the umbrella responds only after the underlying policy pays to its limit.
- Schedule-driven: coverage depends on what policies, limits, and entities are listed in the umbrella schedule.
An umbrella doesn’t float above your insurance—it sits on top of a very specific structure.
Understanding attachment points
The attachment point is the dollar amount where the umbrella begins to pay.
- Primary exhaustion: if your GL limit is $1M per occurrence, the umbrella attaches at $1,000,001.
- Separate attachments: each underlying line (GL, auto, employers liability) can have a different attachment.
- No drop-down by default: umbrellas generally do not fill gaps below the attachment unless explicitly stated.
Many insureds assume an umbrella “kicks in” whenever a loss exceeds comfort. In reality, it only responds after the exact underlying limit is exhausted.
If the primary policy doesn’t pay, the umbrella usually doesn’t either.
The importance of the underlying insurance schedule
The underlying schedule is the backbone of the umbrella. If it’s incomplete or outdated, coverage gaps can form.
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Listed policies only:
the umbrella follows the policies shown on its schedule—not every policy you happen to carry.
New autos, new entities, or new locations must be scheduled properly.
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Required minimum limits:
umbrellas assume specific underlying limits (e.g., $1M GL, $1M auto).
If you reduce a primary limit below the required amount, the umbrella may still attach as if the higher limit existed.
- Named insured alignment: entities covered by the umbrella must match the entities on the underlying policies.
Umbrella coverage follows the schedule—not your intentions.
How misalignment creates coverage gaps
Gaps don’t usually come from missing insurance—they come from mismatched structure.
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Reduced primary limits:
lowering GL or auto limits without updating the umbrella schedule.
Example: GL reduced to $500k while umbrella still assumes $1M.
- Unsheduled policies: adding a new auto policy or switching carriers without updating the umbrella.
- Entity gaps: operating through multiple LLCs, joint ventures, or DBAs not consistently listed.
- Employer’s liability mismatch: WC is statutory, but employers liability often has lower limits that don’t meet umbrella requirements.
- Project-specific requirements: contracts require limits or wording that exceed scheduled underlying coverage.
Most umbrella gaps are administrative—not conceptual.
Special considerations: auto and employers liability
Auto and workers’ compensation are frequent sources of attachment confusion.
- Auto liability: fleet changes, hired/non-owned auto, and symbol mismatches can affect whether the umbrella follows.
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Employers liability:
umbrellas typically require $1M/$1M/$1M EL limits—even though WC itself is statutory.
If EL limits are lower, the umbrella may not respond until the assumed limit is reached.
- Cross-line losses: some claims trigger both GL and auto; alignment across both schedules is critical.
WC may be statutory—but the umbrella is not.
How to keep your umbrella aligned
Umbrella problems are preventable with routine structural checks.
- Review schedules annually: confirm policies, limits, carriers, and entities are current.
- Notify before changes: tell your agent before reducing limits or switching carriers.
- Align entities: ensure all operating entities are named consistently across policies.
- Contract review: compare project requirements to both primary and umbrella structure.
- Document endorsements: verify follow-form language and special conditions.
Umbrellas work best when nothing underneath them is a surprise.
Common questions
Does an umbrella ever drop down?
Sometimes, but only if the policy explicitly provides drop-down coverage. Most commercial umbrellas do not.
What happens if my primary limit is lower than required?
The umbrella may still attach at the required amount, leaving you responsible for the gap.
Do I need to reschedule my umbrella if I change carriers?
Yes. Carrier changes almost always require schedule updates.
Umbrellas are only as strong as what’s underneath
Commercial umbrellas don’t fix weak structure—they amplify it. When underlying schedules, limits, and entities are aligned, umbrellas provide powerful protection. When they aren’t, gaps appear exactly where losses tend to be the largest.