Excess Liability and "Bumbershoot" Architectures
Given the potential for a "Catastrophic Event" (such as a multi-aircraft collision on the ground), standard liability limits are often insufficient. This document explores the Excess Liability and Umbrella layers, sometimes called a "Bumbershoot" policy in maritime-aviation contexts.
The architecture involves "Quota Share" layering, where multiple insurers take a percentage of the risk (e.g., Insurer A takes the first $50M, Insurer B takes the next $150M). The document details the "Follow-Form" logic, where the excess layers adopt the exact same terms and exclusions as the primary "Primary Policy." It also discusses the "Capacity Crunch" in the 2026 reinsurance market, where high-value claims have led to stricter "Underwriting Discipline" and mandatory "Self-Insured Retentions" (SIRs) for large international hubs.