Wheaton, Ill., May 19, 2011--Insurers that write general liability coverage for farms and agribusinesses will soon have access to new policy forms for writing excess and umbrella coverage.
The American Association of Insurance Services (AAIS) recently initiated a countrywide filing of its new Agricultural Commercial General Liability Excess and Umbrella Program (AgXL).
The program, available for use by any insurer, includes three base forms (two umbrella and one excess) and nearly 140 multistate endorsements for tailoring excess and/or umbrella coverage for the needs of a particular risk. The three base forms include:
- Farm Commercial Umbrella Liability Coverage, designed to cover liability above underlying limits only for farming operations and other operations specifically insured in underlying policies. Optional endorsements can be used to extend coverage to other exposures.
- Agribusiness Commercial Umbrella Liability Coverage, which covers liability above underlying limits arising from all of the insured entity's operations, subject to exclusions. Optional endorsements can be used to restrict or exclude coverage for certain exposures.
- Agricultural Commercial Excess Liability Coverage, which provides essentially "follow form" coverage above underlying limits, generally incorporating the terms of the underlying policies. Optional endorsements can be used to extend or restrict coverage for other exposures.
Among many other things, the AgXL's two umbrella base forms effectively give an insurer the option of providing or not providing coverage for personal liability exposures, an important feature of agricultural liability insurance.
The umbrella forms are written and structured to be used with corresponding forms provided under AAIS Agricultural General Liability Program (AgGL), but they can also be used with any underlying auto, employer's liability, recreational vehicle, watercraft, or, with some modification, general liability policy. The third base form, the excess form, can be used to provide an excess layer of coverage over any underlying auto, employer's liability, recreational vehicle, watercraft, or general liability policy.
As with the AgGL forms, the AAIS AgXL base forms include numerous standard exclusions (war, nuclear hazard, etc.) as well as several exclusions specific to agricultural operations. The latter include exclusions for damages arising from certain livestock diseases, chromated copper arsenate (CCA, a substance used to treat lumber) and violations of the Migrant and Seasonal Worker Protection Act.
The nearly 140 optional endorsements provided with the program can be used to extend, limit, or exclude coverage for designated premises, operations, activities or other exposures.
"We have done the work to develop an excess and umbrella layer that will make it easy for ag insurers and their reinsurers go beyond the limits provided in the underlying policies," says Sherry Taylor, AAIS manager of farm and agribusiness. "I am not aware of any ag-specific umbrella/excess policy in the market that can handle such a wide variety of exposures and risk appetites."
AAIS is a national advisory organization that develops policy forms and rating information used by more than 700 P/C insurers throughout the U.S. For information on affiliating with AAIS for use of any of its agricultural insurance programs, contact Rick Maka, director of marketing and strategic alliances, at our contact form
, or by calling 800-564-AAIS, ext. 222.