[U016]

underlying limits

1) In the case of liability excess or umbrella policies, it refers to the limits of the primary (underlying) policy below the excess or umbrella policy which will respond first to loss. Many excess or umbrella policies have established minimum limits for underlying policies. Should the underlying policy not meet the minimum limit requirements, the excess or umbrella will not be offered.

2) With respect to reinsurance, it is the amount that must be exhausted on the underlying coverages or policies before the reinsurance coverage will go into effect.

Copyright: The Rough Notes Company, Inc., 1998, All Rights Reserved. 3040100