I was at the Florida Coverage College’s first ever meeting last Thursday. One panel delivered practical advice that every public adjuster handling layered or surplus lines placements should have etched into their claims checklist.
The discussion focused on excess carriers participating with insurance towers. Mistakes can quietly cost insureds millions. The following are the main lessons based on my notes.
First, put every insurer on notice immediately. In a tower program, do not assume notice to the primary carrier satisfies everyone else. Many excess policies require independent notice “as soon as practicable” once a loss may implicate their layer. If the claim grows and you did not notify early, you may have handed an excess carrier a late-notice defense before the real coverage fight even begins. Send notice to every carrier in the stack. Do it right away and in writing.
Second, obtain every policy, not just the primary policy. You need the primary, every excess layer, all endorsements, manuscript forms, and any referenced schedules. Excess carriers frequently modify language rather than strictly follow form. One altered definition or added exclusion can materially change coverage. A broker summary is not enough. If you do not have the entire tower, you do not know the coverage.
Third, if the policy references a “Total Insured Values” sheet or “Statement of Values,” get it immediately. Total Insured Values often drive premium, coinsurance analysis, blanket limits, and margin clause operation. In many programs, the numbers on that schedule determine how much coverage is actually available.
Next, determine the time requirements for each policy. Notice deadlines, proof of loss provisions, suit limitation clauses, and arbitration demand deadlines may differ by layer. Some policies contain one-year suit limitations. Others differ. Tolling agreements can be lifesavers, but only if they apply to each carrier and expressly include contractual suit limitations. Filing suit against one carrier to preserve rights while negotiating with others requires strategy. These are not administrative details. They often involve legal opinions, something which public adjusters should be careful not to make.
Should a proof of loss be submitted to each carrier? Unless clearly excused in writing, yes. Do not assume that complying with the primary satisfies the excess. Some excess policies require independent compliance with post-loss obligations. Failure to provide a proof of loss on time, if required by the policy, gives carriers procedural defenses that distract from the merits. Parallel compliance avoids unnecessary fights.
Determine covered perils across the tower. Do not assume uniformity of coverage terms. One layer may follow form; another may carve out a peril. Definitions of “flood,” “occurrence,” or “named storm” may vary. Excess carriers sometimes limit coverage in ways the primary does not. Confirm each layer is triggered by the same peril theory.
A former insurance defense lawyer on the panel made a simple but powerful point that providing organized, clear, and credible information leads to payment. Claims that are well documented, causation that is supported, and damages that are coherently presented reduce the insurer’s ability to delay payment. Transparency and preparation build credibility. Obstruction and gamesmanship do not.
The panel raised the “Follow the Leader” issue. Some excess policies require the excess carrier to adopt the primary carrier’s coverage determinations. Others expressly state their obligations are “several and not joint,” meaning each carrier evaluates coverage independently. If the obligations are several, winning with the primary does not guarantee payment from the excess. Know what you are dealing with before you negotiate. Does the policy have an enforceable Follow the Leader clause?
Determine when payment is owed. Many excess policies attach a duty to pay only after “actual payment” of underlying limits. What happens if the primary disputes coverage? What if there is a below-limits settlement? Does exhaustion require payment by the underlying insurer, or can the insured fill the gap? Attachment language drives strategy. My personal experience is that case law, in combination with policy language, drives when the excess carrier has a duty to pay.
Immediately identify limits, sublimits, deductibles, and percentage storm deductibles. In catastrophe claims, the deductible calculation alone can determine whether the excess layer is triggered.
Review applicable law, venue provisions, and arbitration clauses. Surplus lines and manuscript placements often contain choice-of-law provisions favoring insurer-friendly jurisdictions. Arbitration clauses can eliminate jury trials and impose extraordinary costs. That raises a legitimate question: should insurance agents warn insureds when a policy contains mandatory arbitration that may cost hundreds of thousands of dollars in panel fees? That discussion is overdue.
Finally, do not overlook Protective Safeguards Provisions. These endorsements, increasingly common, require operational sprinklers, alarms, or monitoring systems. Failure to maintain them can suspend coverage. They are technical, unforgiving, and frequently litigated. Public adjusters must identify and evaluate compliance early.
Excess towers require discipline to read all policies fully. They require parallel compliance. They require strategic coordination from day one. These are not routine claims, and they can lead to coverage battles. So, my advice is similar to the panel’s: treat a claim with layered coverage in a coordinated manner from the start of the claim. Determine who is handling the matter for each carrier, because once the excess carriers raise procedural defenses, you are no longer negotiating a claim. Instead, you may be defending one.
The panelists were excellent in their instruction. These experts included Matt Litsky, Cass Maliszewski, and Gina Clausen Lozier.
I also want to give a huge shout-out to Debbie Crockett. She is the first attorney who came to me with an idea for such an event and pushed for the Florida Bar to recognize insurance coverage as a legal discipline worthy of Board Certification.
Thought For The Day
“The difference between ordinary and extraordinary is that little extra.”
— Jimmy Johnson
