Bumbershoot Liabilities
American Marine Insurance Forum
April 2010 Luncheon
Commercial Accounts
Ocean 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
General
Liability
Commercial
Auto
EL
Marine
Liability
Bumbershoot Structure
Infinity
Following Form
$5M
Bumbershoot
Vessel
Pollution
$1M
GL
Auto
EL
P&I
Layered Bumbershoot Structure
Their B’shoot
My B’shoot
Your B’shoot
Layered Following Form Structure
A.I.F.F.E.M.L.C.
A.I.F.F.E.M.L.C.
A.I.F.F.E.M.L.C.
Bumbershoot
The Marine Definition
As 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.
NonMarine
20%
Marine
80%
Probable Maximum Loss
The 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
# of Boats Stored Largest Bldg
PML
$50,000
50
$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 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.
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 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.
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 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.
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
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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
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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
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Occupational Disease,
Fine, Penalties, Punitive Damages,
Pollution,
War,
Any exclusion in an underlying policy is an exclusion
in this policy,
Thank You