An umbrella covers a claim that the underlying general liability policy excludes entirely. Before the umbrella will respond to that claim, the insured normally must:
Explanation
Where an umbrella is broader than the underlying insurance it drops down and acts as primary for that loss, and the insured absorbs a self-insured retention — a deductible-like amount stated in the umbrella — before the umbrella pays. Exhausting an underlying aggregate matters when the underlying policy does cover the loss but has run out of limit, which is not the case here. No consent from the primary insurer is needed, and buying back the exclusion would defeat the point of the drop-down.
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