Part 2 – Coverages and Exclusions

Part 3 – Maintenance of Underlying Insurance, Duties After Loss, and General Provisions

Definitions

A. Throughout this policy, "you" and "your" refer to:
1. The "named insured" shown in the Declarations; and
2. The spouse if a resident of the same household.

B. "We," "us" and "our" refer to the Company providing this insurance.

C. For purposes of this policy, a private passenger type auto, pickup or van shall be deemed to be owned by a person if leased:
1.Under a written agreement to that person; and
2.For a continuous period of at least six months.
Other words and phrases are defined. They are in quotation marks when used.

D. "Aircraft Liability", "Hovercraft Liability", "Recreational Motor Vehicle Liability" and "Watercraft Liability", subject to the provisions in 2. below, mean the following:
1. Liability for "bodily injury" or "property damage" arising out of:
a. The ownership of such vehicle or craft by an "insured";
b. The maintenance, occupancy, operation, use, loading or unloading of:
(1) An aircraft, hovercraft or watercraft by any person;
(2) A "recreational motor vehicle" by an "insured";
c. The entrustment of such vehicle or craft by an "insured" to any person;
d. The failure to supervise or negligent supervision of any person involving such vehicle or craft by an "insured"; or
e. Vicarious liability, whether or not imposed by law, for the actions of a child or minor involving such vehicle or craft.
2. For the purpose of this definition:
a. Aircraft means any contrivance used or designed for flight, except model or hobby aircraft not used or designed to carry people or cargo;
b. Hovercraft means a self-propelled motorized ground effect vehicle and includes, but is not limited to, flarecraft and air cushion vehicles;
c. Watercraft means a craft principally designed to be propelled on or in water by wind, engine power or electric motor, except model or hobby watercraft not used or designed to carry people or cargo; and
d. Recreational motor vehicle means a "recreational motor vehicle" as defined in Paragraph N.

Analysis

The definitions start with the commonly found definitions for "you" and "we" or "us," showing that those terms represent the insured and the insurer, respectively, when used in the policy.

Because leased vehicles are so common, this policy makes it clear that an auto that is leased is considered to be an owned vehicle by the insured.As long as the auto, pickup, or van is under a written agreement to an insured and is leased for a continuous period of at least six months, it will be considered to be owned by the insured. Interest in the propertyis critical, and without insurable interest, coverage will not be provided.

The form defines aircraft as any vehicle used or designed for flight with an exception for model or hobby aircraft not used or designed to carry people or cargo. This would include drones. Hovercraft are self-propelled motorized ground-effect vehicles including flarecraft and air cushion vehicles. Watercraft are those used primarily on or in the water and propelled by wind, engine or electric motors, again with an exception for model or hobby watercraft not designed to carry people or cargo. Any remote control boat used for recreation would be included in that exception. A "recreational motor vehicle" is defined as an all-terrain vehicle, dune buggy, golf cart, snowmobile, or other motorized land vehicle designed for recreational use off public roads.

Aircraft, hovercraft, watercraft and recreational vehicle liability are all defined terms and subject to the definitions just discussed. The definitions make it clear what vehicles do and do not fall under the specific liability categories.

"Aircraft Liability", "Hovercraft Liability" "Watercraft Liability" and "Recreational Motor Vehicle Liability" all center around ownership and use of the vehicles and are defined as follows. The definition includes liability for "bodily injury" or "property damage" arising out of the ownership of such craft by an "insured"; maintenance, use, occupancy, operation, use, loading or unloading of an aircraft, hovercraft, or watercraft by any person, or a "recreational motor vehicle" by an "insured". This language has changed from earlier forms. In those forms, the liability for a "recreational motor vehicle" was not restricted to an "insured" and was included with the maintenance, occupancy, operation, use, loading or unloading of an aircraft, watercraft, hovercraftby any person. In the updated form, injury or property damage arising out of maintenance, occupancy, operation, use, loading or unloading of a recreational vehicle is limited to an "insured". Liability of aircraft, hovercraft, watercraft or recreational vehicles also includes the entrustment of such a vehicle by an "insured" to another person, the failure of the "insured" to supervise any person using such a vehicle, and vicarious liability of a child or minor using such a vehicle, whether or not imposed by law.

These definitions make it abundantly clear how the policy views liability for any motor vehicle. Once defined, the policy can then address providing or excluding coverage.

E."Auto" means:
1. A private passenger motor vehicle, motorcycle, moped or motor home;
2. A vehicle designed to be pulled by a private passenger motor vehicle or motor home; or
3. A farm wagon or farm implement while towed by a private passenger motor vehicle or motor home.

F."Bodily injury" means bodily harm, sickness or disease, including required care, loss of services and death that results.

Analysis

These are common and familiar definitions, and mirror those used in other ISO policies. The umbrella provides excess limits over the underlying personal auto policy, so auto must be defined. Auto includes a private passenger motor vehicle, motor home, a vehicle designed to be pulled by the above, motorcycle, moped, or a farm wagon or farm implement while being towed by a private passenger motor vehicle or motor home. Farm wagons or farm implements are not covered under other circumstances.

The ISO umbrella program requires that the insured carry an adequate underlying personal auto policy to be eligible for the umbrella policy. However, DL 98 11 Personal Umbrella Liability Policy Auto Liability Exclusion Endorsement may be used to waive the eligibility requirement. DL 98 13 Personal Umbrella Liability Policy Exclusion – Designated Auto Endorsement may also be used to specifically exclude one or more designated autos.

Bodily injury retains the exact definition in the homeowners forms, meaning bodily harm, sickness or disease, including required care, loss of services, and death. The inclusion of required care and loss of services shows the policy will pay for long-term care and expenses, not just the cost of immediate medical care. When an umbrella policy is paired with a homeowners policy, the insured will have much greater protection against bodily injury liability.

G."Business" means:
1. A trade, profession or occupation engaged in on a full-time, part-time or occasional basis;
2. The leasing of the mineral rights of a premises or vacant land owned by an "insured";
3. "Home-sharing host activities"; or
4. Any other activity engaged in for money or other compensation, except the following:
a. One or more activities, not described in b. through d. below, for which no "insured" receives more than $5,000 in total compensation for the 12 months before the beginning of the policy period;
b. Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity;
c. Providing home day care services for which no compensation is received, other than the mutual exchange of such services; or
d. The rendering of home day care services to a relative of an "insured".

H."Family member" means a resident of your household who is:
1. Your relative, including a ward or foster child; or
2. Under the age of 21 and in the care of you or an "insured" who is age 21 or over.

Analysis

Business means a trade, profession, or occupation, whether it is full-time, part-time, or occasional. The business definition was amended to be in line with revisions made in the 2022 homeowners program. This includes the addition of the leasing of mineral rights of a premises or vacant land owned by an insured within the definition of business, and home-sharing host activities, which is defined later in the policy. The dollar limit before an activity is considered a business has been increased from $2,000 to $5,000 for the preceding 12 months in the 2026 program.

The standard exceptions for volunteer activities for which no money is received, home day care services for which no money is received, and the rendering of home day care services to a relative of an insured apply. Also excluded is any activity for which an insured receives no more than $5,000 in the previous 12 months. Since business liabilities are excluded under the umbrella form, the exceptions to business, such as volunteer activities or very small businesses, would be awarded coverage.

"Family member" means a resident of the insured's household that is a relative, including a ward or foster child, a resident under the age of 21 and in the named insured's care or an insured who is 21 or over. "Family member" is defined because, as shown below, family members fall within the definition of "insured."

I."Fuel System" means:
1. One or more containers, tanks or vessels which have a total combined storage capacity of 100 or more U.S. gallons of liquid fuel; and:
a. Are, or were, located on any single location covered by "underlying insurance"; and
b. Are, or were, used to hold liquid fuel that is intended to be used solely for one or more of the following:
(1) To heat or cool a building;
(2) To heat water;
(3) To cook food; or
(4) To power motor vehicles, other motorized land conveyances or watercraft owned by an "insured";
2. Any pumping apparatus, which includes the motor, gauge, nozzle, hose or pipes that           are, or were, connected to one or more containers, tanks or vessels described in paragraph             I.1.;
3. Filler pipes and flues connected to one or more containers, tanks or vessels described      in paragraph I.1.;
4. A boiler, furnace or a water heater, the liquid fuel for which is stored in a container, tank     or vessel described in Paragraph I.1.;
5. Fittings and pipes connecting the boiler, furnace or water heater to one or more containers, tanks or vessels described in Paragraph I.1.; or
6. A structure that is specifically designed and built to hold the liquid fuel that escapes from one or more containers, tanks or vessels described in Paragraph I.1.

Analysis

"Fuel system" is extensively defined for the purposes of precluding coverage for any occurrence involving the escape of fuel from a fuel system. As discussed later in this article series, exclusion 21 precludes coverage for bodily injury, personal injury, or property damage caused by an occurrence involving the escape of fuel from a fuel system. The homeowners form covers liability for the escape of liquid fuel up to the policy limits, unless an endorsement such as HO 05 80 03 22 (Property Remediation for Escaped Liquid Fuel and Limited Lead and Escaped Liquid Fuel Liability coverages) is attached. If this is the case, then the limit of liability for this type of occurrence can be changed since the endorsement requires a scheduled limit. The umbrella excludes liability coverage altogether.

J. "Insured" means:
1. You.
2. A "family member."
3. Any person using an "auto," recreational motor vehicle," or watercraft, which is owned by you and covered under this policy. Any person using a temporary substitute for such "auto" or "recreational motor vehicle" is also an "insured."
4. Any other person or organization but only with respect to the legal responsibility for acts or omissions of you or any "family member" while you or any "family member" is using an "auto" or "recreational motor vehicle" covered under this policy. However, the owner or lessor of an "auto" or "recreational motor vehicle" loaned to or hired for use by an "insured" or on an "insured's" behalf, is not an "insured."
5. With respect to animals owned by you or any "family member," any person or organization legally responsible for such animals. However, a person or organization using or having custody of such animals in the course of any "business" or without the consent of the owner is not an "insured."

Analysis

Insureds include the named insured, family members, discussed above, and any person using an auto, recreational motor vehicle, or watercraft that is owned by the insured and is covered under the umbrella policy.

The umbrella provides broad coverage in that any person using an auto, watercraft, or recreational motor vehicle owned by the insured and covered by the umbrella policy is an insured with respect to that vehicle. Any person using a temporary substitute for such a vehicle is also an insured.

A person or organization that is legally liable for the action of the named insured or a family member while they are using an auto or recreational motor vehicle is also covered by the policy. If an insured uses his vehicle to do volunteer work for, say, a church, and negligently causes an accident, the church is also an insured if it is held liable for the driver's accident. However, if an insured rents or borrows an auto or recreational motor vehicle and causes an accident, the owner or lessor of the vehicle is not an insured. The owner or lessor of the vehicle should presumably have their own insurance.

Also included as an insured is any person or organization legally responsible for animals that are owned by the named insured or their family members. If the insured goes on vacation and asks his neighbor to dog sit, then the neighbor is legally responsible for the dog. If the dog then bites someone, the neighbor would be provided coverage under the policy. However, exempt from an insured are a person or organization having custody of the animal in the course of their business or without the consent of the owner. Again, presumably, a pet care business would have its own insurance available.

K. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in:
1. "Bodily injury"; or
2. "Property damage."

L. "Personal injury" means injury arising out of one or more of the following offenses, but only if the offense was committed during the policy period:
1. False arrest, detention or imprisonment;
2. Malicious prosecution;
3. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor;
4. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; or
5. Oral or written publication of material that violates a person's right of privacy.

Analysis

Occurrence means an accident which results in bodily injury or property damage, including continuous or repeated exposure to the same general harmful conditions. The latter part is important as it explains that repeated exposure to the same harmful condition counts as a single occurrence. If someone is exposed to asbestos on the insured's property every day resulting in health problems, each exposure does not count as its own occurrence, but the continuous and repeated exposure to the asbestos constitutes a single occurrence.

A huge benefit of having personal umbrella coverage is having protection for "personal injury"—actions other than bodily injury and property damage, traditionally referred to as nonbodily injury. This coverage is not found in the ISO homeowners forms, although it may be added by endorsement.

Personal injury includes libel and slander, false arrest, malicious prosecution, wrongful eviction or wrongful entry into a private room, dwelling, or premises committed by or on behalf of its owner, landlord, or lessor. The umbrella provides coverage for damages resulting from any of these for which an insured becomes legally liable. Defense coverage may also be provided for a personal injury offense; it is not just limited to bodily injury or property damage.

Note that the forms specify that oral or written publication, "in any manner," that slanders, libels, or violates a person's right of privacy is included as "personal injury." That language was added in the 2015 revision of the program in response to the widespread use of the internet and social media. This means that personal injury is not just limited to physical written publication but also includes social media posts and videos.

However, there are limitations to personal injury coverage, which will be discussed in the coming exclusion section of the series.

M. "Property damage" means physical injury to, destruction of, or loss of use of tangible property.

N. "Recreational motor vehicle" means:
1. All-terrain vehicle;
2. Dune buggy;
3. Golf cart;
4. Snowmobile; or
5. Any other motorized land vehicle which is designed for recreational use off public roads.
O. "Retained limit" means:
1. The total limits of any "underlying insurance" and any other insurance that applies to an "occurrence" or offense which:
a. Are available to an "insured"; or
b. Would have been available except for the bankruptcy or insolvency of an insurer providing "underlying insurance"; or
2. The deductible, if any, as stated in the Declarations, if the "occurrence" or offense:
a. Is covered by this policy; and
b. Is not covered by "underlying insurance" or any other insurance.

P. "Underlying insurance" means any policy providing the "insured" with primary liability insurance covering one or more of the types of liability listed in the Declarations and at limits no less than the retained policy limits shown for those types of liability listed in the Declarations.

Analysis

"Property damage" retains its typical definition, meaning physical injury to, destruction of, or loss of use of tangible property. Tangible property is specifically mentioned, so intangible property, such as stocks or bonds, is not included.
The retained limit can refer to either the total limits of underlying insurance available to the insured, or that would have been available except for the bankruptcy or insolvency of the insurer providing underlying insurance, or to the deductible, if any, applying to losses covered by the umbrella policy and not covered by underlying or other insurance.

Many umbrella forms use the term retained limit to refer to a deductible for which the insured is responsible before the umbrella provides coverage, often $250. Say, for example, the insured is required to maintain $300,000 combined single limit auto liability, and the umbrella has a $250 retained limit. A covered claim is made for $500,000. The insured "retains" $300,250 of the loss, although $300,000 of it will be covered by the underlying auto insurance.

The definition of underlying insurance is a reminder that the insured is required to maintain certain limits of liability insurance, as set forth in the insurer's underwriting guidelines. Underlying insurance requirements vary by insurer.

The ISO personal umbrella manual states that an adequate program of underlying insurance must be maintained by the insured and scheduled in the Declarations page. Underlying coverages must include a homeowner's or a personal liability policy, or equivalent, and a personal auto policy, or equivalent. However, DL 98 11 Personal Umbrella Liability Policy Auto Liability Exclusion Endorsement may be used to waive the auto policy eligibility requirement.

If the underlying insurer goes bankrupt or insolvent, the umbrella insurer will not drop down and provide that coverage. The umbrella will respond as if the underlying insurance is still in place and active. It is important for insureds to choose trusted and financially secure insurers for the underlying insurance, or they may be liable for much more than they bargained for.

Q. "Cannabis" means:
1. Any good or product that consists of or contains any amount of Tetrahydrocannabinol (THC) or any other cannabinoid, regardless of whether any such THC or cannabinoid is natural or synthetic.
2. Paragraph Q.1. above includes, but is not limited to, any of the following containing such THC or cannabinoid:
a. Any plant of the genus Cannabis L., or any part thereof, such as seeds, stems, flowers, stalks and roots; or
b. Any compound, by-product, extract, derivative, mixture or combination, such as:
(1) Resin, oil or wax;
(2) Hash or hemp; or
(3) Infused liquid or edible cannabis;
whether or not derived from any plant or part of any plant set forth in Paragraph Q.2.a. above.
3. Paragraph Q.1. above includes, but is not limited to, marijuana.

R. "Delivery network platform" means an online-enabled application or digital network, used to connect customers with:
1. Drivers; or
2. Local vendors using drivers;
for the purpose of providing prearranged delivery services, including courier services, for compensation. A "delivery network platform" does not include a "transportation network platform".

S. "Home-sharing host activities" means:
1. The:
a. Rental or holding for rental; or
b. Mutual exchange of services;
in whole or in part, by an "insured", of a premises owned by an "insured", to a "home-sharing occupant" through the use of a "home-sharing network platform"; and
2. Any other related property or services made available by an "insured" for use during such:
a. Rental; or
b. Mutual exchange of services;
except those property or services provided by another party.

T. "Home-sharing network platform" means an online-enabled application, web site or digital network that:
1. Is used for the purpose of facilitating, for money, mutual exchange of services or other compensation, the rental of a dwelling or other structure, in whole or in part; and
2. Allows for the agreement and compensation with respect to such rental to be transacted through such online-enabled application, web site or digital network.

U. "Home-sharing occupant" means a person, other than an "insured", who:
1. Has entered into an agreement or arranged compensation with an "insured" through the    use of a "home-sharing network platform" for "home-sharing host activities"; or
2. Is accompanying or staying with a person described in Paragraph U.1. of this provision       under such "home-sharing host activities".

V. In this Policy, the terms:
1. Roomer; or
2. Boarder;
do not include a "home-sharing occupant".

W. "Transportation network platform" means an online-enabled application or digital network used to connect passengers with drivers using vehicles for the purpose of providing prearranged transportation services for compensation.

Analysis

All of these terms have been added in the 2026 revision of the personal umbrella program. However, many are not new to ISO, but mirror definitions found in the 2022 homeowners form, 2018 personal auto policy, or personal umbrella endorsements. The cannabis definition mirrors the 2022 homeowners form, and is specifically excluded later in the policy, along with other controlled substances.

Cannabis includes any product containing any amount of THC or cannabinoids, regardless of whether it is natural or synthetic. Cannabis includes plants of the genus Cannabis L., or any part thereof, including stalks, stems, seeds, flowers, and roots, and any compound by-product, extract, derivative, mixture, or combination. Examples include, but are not limited to, resin, oil, wax, hash, hemp, infused liquid or edible cannabis, whether or not derived from any plant or plant part as listed. The definition specifies that marijuana is included.

This may result in a reduction of coverage from the previous iteration of the personal umbrella form since all types of cannabis are now excluded, not just those defined as a controlled substance by the Federal Food and Drug Law. Even though cannabis has been legalized by many states, liability arising from its use or distribution is still excluded.

"Delivery network platform" was introduced in 2022 to the Personal Auto Program in response to the abundance of such platforms, such as DoorDash, Uber Eats, and Instacart. It is defined as an online enabled application or digital network that is used to connect customers with drivers or local vendors using drivers for the purpose of providing delivery services for compensation. The definition specifies that a delivery network platform is separate from a transportation network platform.

"Home-sharing network platform" and "home-sharing occupant" have also been added, mirroring the 2022 homeowners form, in response to the prevalence of home-sharing services, such as Airbnb and VRBO.

"Home-sharing host activities" is the rental or holding for rental of a part or whole of the premises by an insured to a home-sharing occupant through the use of a home-sharing network platform. Home-sharing host activities is included within the definition of "business", which means it is excluded from coverage in the policy. A "home-sharing occupant" is a person who entered into an agreement with an insured through a home-sharing network platform to rent a part or whole of the premises, or anyone staying with that person. The next section makes it clear that a home-sharing occupant is not considered a roomer or a boarder. This is because roomers and boarders are awarded coverage under specific circumstances in the policy, but the policy makes it clear that home-sharing occupants are never considered roomers or boarders.

"Transportation network platform" has also been added following revisions to the personal auto program, in response to the growth of those types of services, such as Uber and Lyft. It is defined as an online-enabled application or digital network used to connect passengers with drivers for the purpose of providing prearranged transportation services for compensation.

These terms are defined so the insured knows the extent of their coverage, as they are excluded later in the policy. The base umbrella is not meant to protect against these business exposures and liabilities, and neither are the underlying homeowners or personal auto policies. However, there are endorsements available that can provide coverage.