Bumbershoot Liabilities

American Marine Insurance Forum April 2010 Luncheon

Commercial AccountsOcean Cargo

Bumbershoot is an annual international music and arts festival held in Seattle, Washington. One of North America's largest such festivals,[1] it takes place every Labor Day weekend at the 74-acre (299,000 m²) Seattle Center, which was built for the 1962 World's Fair. Seattle Center includes indoor theaters, outdoor stages, McCaw Hall, and Memorial Stadium.[2] The name of the festival was taken from bumbershoot, a colloquial term for umbrella, probably coined in the 19th century as a portmanteau of umbrella and parachute.[3]

Bumbershoot is also another name for an umbrella.

BUMBERSHOOT LIABILITIES

CommercialAuto

ELMarine

LiabilityGeneral Liability

Bumbershoot Structure

Auto P&IEL

VesselPollution

$1M

Following Form

GL

$5M

Bumbershoot

Infinity

Layered Bumbershoot Structure

Your B’shoot

My B’shoot

Their B’shoot

Layered Following Form Structure

Bumbershoot

A.I.F.F.E.M.L.C.

A.I.F.F.E.M.L.C.

A.I.F.F.E.M.L.C.

The Marine DefinitionAs a standard, we will use the “80/20 Rule” when determining a risk’s acceptability as an

excess marine placement. The rule in general states that no more than 20% of the

operations of an Insured being covered should be from non-marine activities.

This is usually measured in terms of revenues, but there are some operations that are so

ultra-hazardous that no matter what amount of revenues they generate, the risk would be

unacceptable. Examples of these would include the manufacturing of aircraft parts and

equipment, manufacturing of hospital and medical equipment, and the repair and

maintenance of nuclear power plants.

Marine80%

Non-Marine

20%

Probable Maximum LossThe PML for a given risk is determined by either actual calculation or by company guidelines based on the general characteristics of a given risk.

As many of the marine liabilities that we write cover property in the Insured’s care, custody and control, a simple calculation will usually provide you that risk’s PML.

Ave Value of Boat $50,000

# of Boats Stored Largest Bldg 50

PML $2,500,000

Other risk’s PML will be harder to determine, but will usually be driven by exposures such as bodily injury liability, products and completed liability, and pollution liability. Their PML will be determined by company guidelines.

Why Do We Need A Bumbershoot?

The Bumbershoot Policy

Insuring Agreement: Coverage *

Limits of Liability *

Insured

General Conditions: Cancellation

Insolvency

Additional Insureds

Vessels Insured

Definitions: Bodily Injury

Property Damage

Exclusions: General of Absolute *

Conditional

Two Bumbershoots Givens

A known liability exposure cannot be left uninsured and have coverage provided by a Bumbershoot or an Umbrella.

Sub-limits not divulged and scheduled, are not an underlying coverage of a Bumbershoot.

Bumbershoot Insuring Agreement

All protection and indemnity risks whatsoever, General average, collision liabilities, towers liabilities,

salvage, salvage charges, and sue and labor arising from any cause whatsoever,

All other sums the Assured shall become legally obligated to pay or by contract or agreement become legally obligated to pay on account of “bodily injury” or “property damage”.

Bumbershoot Insuring Agreement

All protection and indemnity risks whatsoever, General average, collision liabilities, towers liabilities,

salvage, salvage charges, and sue and labor arising from any cause whatsoever,

All other sums the Assured shall become legally obligated to pay or by contract or agreement become legally obligated to pay on account of “bodily injury” or “property damage”.

All liabilities insured against under any scheduled underlying policy….this policy shall provide excess coverage on a following form basis,

Limit of Liability

If underlying is subject to an annual aggregate then this policy shall also be subject to an annual aggregate,

If an underlying aggregate is reduced or exhausted….this policy shall apply in excess of the reduced underlying limit or, if such limit is exhausted as underlying insurance.

Limit of LiabilityIf underlying is subject to an annual aggregate then this

policy shall also be subject to an annual aggregate,

If an underlying aggregate is reduced or exhausted….this policy shall apply in excess of the reduced underlying limit or, if such limit is exhausted as underlying insurance.

In the event of reduction or exhaustion of the aggregate limits of liability under underlying insurance by reason of losses paid thereunder, such underlying insurances shall, be deemed to have been reinstated in full, notwithstanding anything herein contained to the contrary.

Limit of LiabilityIf underlying is subject to an annual aggregate then this policy

shall also be subject to an annual aggregate,

If an underlying aggregate is reduced or exhausted….this policy shall apply in excess of the reduced underlying limit or, if such limit is exhausted as underlying insurance.

In the event of reduction or exhaustion of the aggregate limits of liability contained within an “underlying policy” by reason of losses paid thereunder, the Insured will make every reasonable effort to have such “underlying policy” reinstated or replaced in full, notwithstanding anything herein contained to the contrary.

Limit of LiabilityIf underlying is subject to an annual aggregate then this policy

shall also be subject to an annual aggregate,

If an underlying aggregate is reduced or exhausted….this policy shall apply in excess of the reduced underlying limit or, if such limit is exhausted as underlying insurance.

In the event of the reduction or exhaustion of the aggregate limits contained in any of the underlying coverages listed in the Schedule of Underlying Insurance solely by reason of the payment of losses in respect of occurrences taking place during the period of this Policy, this Policy shall apply, subject to the terms and conditions of the underlying insurance, in excess of the reduced underlying limit or, if such limit is exhausted, as underlying insurance.

Bumbershoot Absolute Exclusions

Breach of Fiduciary Duty Discrimination, ERISA, Employment-Related Practices, Workers Compensation and Similar Acts, Fraud, Infidelity, Dishonesty, Criminal Acts, Occupational Disease, Fine, Penalties, Punitive Damages, Pollution, War,

Bumbershoot Absolute Exclusions

Occupational Disease, Fine, Penalties, Punitive Damages, Pollution, War, Notwithstanding anything contained herein to the

contrary, in the event that coverage is excluded in a Policy listed in the Scheduled of Underlying Insurances, it is understood and agreed that said coverage is also excluded under this Policy unless said coverage is provided elsewhere in a Policy listed in the Schedule of Underlying Insurances.

Bumbershoot Absolute Exclusions

Occupational Disease, Fine, Penalties, Punitive Damages, Pollution, War, Any exclusion in an underlying policy is an exclusion

in this policy,

Thank You