Umbrella and Excess Liability
An umbrella is priced off the policies underneath it, so an overstated exposure on your general liability or auto is charged twice: once on the underlying line, and again in the factor applied on top of it. Koala is not reviewing this line yet.
Koala does not review this line yet, and this page is not an offer to. Everything below describes how the line is rated and where its errors come from; none of it describes a service you can order today. Workers' compensation, in Texas, is the only review Koala performs.
You pay for the same wrong number twice.
An umbrella does not measure your business. It measures the policies that already did, and applies a factor to them. So a payroll figure overstated on the workers' compensation policy is not one error costing you once — it is the base of a second calculation sitting on top of it. That is the whole argument for checking this line, and it is why it is queued behind the lines it rates off.
Umbrella and excess
Limits sitting above your general liability, commercial auto and employers' liability, picking up where those policies stop. Most contracts that require an umbrella specify a limit, which is why almost nobody examines how the number is priced.
What the premium is built from
- Underlying premium and exposure
- The rating base is the schedule of policies beneath it — their premiums, their exposures, and their limits. The umbrella does not measure your business directly; it measures the policies that already did.
- Schedule of underlying insurance
- The list of policies and required limits the umbrella sits above. If that schedule does not match the policies you actually hold, both the price and the coverage are being computed from a document that is wrong.
- Attachment point
- The limit at which the umbrella starts paying. It has to line up exactly with the underlying limits; a gap between them is yours.
- Increased limit factor
- The multiplier applied for each additional layer of limit. It is applied to the base, so it magnifies whatever the base got wrong.
Three ways this number goes wrong.
None of these is fraud, and none of them requires anybody to have behaved badly. They are what happens when a figure is entered once, under time pressure, by somebody who will never see the invoice it produces.
Error 01
Every underlying error is charged a second time
This is the structural one, and it is why the line is worth checking at all. Because the umbrella is priced as a function of the policies beneath it, an overstated payroll on the workers' compensation policy or an overstated receipts figure on the general liability does not just inflate that policy. It inflates the base the umbrella factor is applied to, and you pay for the same wrong number twice.
Error 02
The underlying schedule stops matching the policies
Underlying limits change at renewal. The schedule attached to the umbrella is a separate document, amended by endorsement, and the two drift apart quietly. The consequence runs in both directions: priced against limits you no longer carry, and attaching above a point your primary policy does not reach.
Error 03
Exposures are counted on more than one line
An operation that appears on both the general liability and the auto schedule can be picked up twice in the umbrella's base. Nothing in the ordinary renewal reconciles the two schedules against each other, because they are usually rated by different underwriters working from different submissions.
What you can do about it today
Nothing, from Koala, on this line. The cheap check you can run yourself is whether the schedule of underlying insurance attached to the umbrella still lists the limits you actually carry, because a mismatch there is both a pricing question and a coverage gap.
The other lines
- Workers' CompLiveYour premium is built from three numbers entered by hand: the class code each worker is filed under, how payroll is split across those codes, and the experience mod carried over from past claims. Koala rebuilds all three from the published rate tables, for employers paying premium in Texas.
- General LiabilityIn developmentGeneral liability is rated on receipts or payroll by classification and trued up at audit, and the single largest line on most contractors' audits is subcontractor cost charged at full rate. Koala is not reviewing this line yet.
- Commercial AutoIn developmentCommercial auto is rated vehicle by vehicle, and the schedule it is rated from is a list somebody last reconciled at binding. Sold trucks, departed drivers and stale garaging territories all keep billing. Koala is not reviewing this line yet.
One line is live. This is not it.
Koala reviews workers' compensation premium in Texas, and nothing else yet. If that is a policy you hold, a review costs nothing to ask about. If it is not, there is nothing here to buy today.