New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following opinion on August 25, 2005, representing the position of the New York State Insurance Department.

RE: Commercial Umbrella Policy’s Aggregate Limits of Liability

Question Presented:

May a commercial umbrella policy contain an annual aggregate limit for its commercial automobile coverage, either as a separate aggregate limit or as part of an overall policy aggregate limit?

Conclusion:

Yes. There is nothing in the Insurance Law that prohibits a commercial umbrella policy from containing an annual aggregate limit for its commercial automobile coverage.

Facts:

Since this was a general inquiry, no additional facts were furnished.

Analysis:

N.Y. Codes R. & Regs. tit. 11, § 161.1(d) (Regulation 129) (McKinney 2005) in pertinent part states:

(d) Commercial umbrella policy means a commercial liability insurance policy (except as modified by subdivisions (i) and (j) of this section), written as excess over underlying policies providing standard form general liability and motor vehicle liability insurance issued to and warranted to exist by the named insured, that include coverage limits of at least $300,000 in the aggregate for bodily injury liability; and $50,000 for property damage liability. With respect to losses not covered by underlying insurance, the policy shall require an insured’s retention of risk, and be excess over, at least $10,000 per accident or occurrence.

Regulation 129 is a rating regulation. Regulation 129 defines a commercial umbrella policy as a policy that provides both general liability and auto liability insurance on an excess basis over the primary insurance. In as much as the automobile coverage is excess over the statutory coverage required by the Vehicle Traffic Law & Regulation 35-A, there is nothing in this, or other regulations, or the New York Insurance Law that precludes a commercial umbrella policy from containing an annual aggregate limit on its commercial automobile coverage, either as a separate aggregate limit or as part of an overall policy aggregate limit. Therefore, a commercial umbrella policy may contain either form of aggregate limit for commercial automobile coverage.

For further information you may contact Associate Attorney Sally Geisel at the New York City Office.