Follow Form Excess

Example

“The company's follow form excess policy provided an additional $5 million in liability coverage above their primary $1 million policy, using identical terms and exclusions.”

Memory Tip

Think 'Follow the Leader' - the excess policy follows whatever the primary policy does, like a game of follow the leader.

Why It Matters

Follow form excess provides cost-effective additional coverage without the complexity of negotiating separate policy terms. This ensures consistent protection and reduces coverage gaps that could occur if excess policies had different terms than primary coverage.

Common Misconception

People often confuse follow form excess with umbrella policies, thinking they're identical. While similar, umbrella policies may provide broader coverage than the underlying policies, whereas follow form excess specifically mirrors the primary policy's exact terms and won't cover anything the primary policy excludes.

In Practice

A manufacturing company has a $2 million primary general liability policy and a $10 million follow form excess policy. When facing a $8 million lawsuit for product liability, the primary policy pays its $2 million limit, and the follow form excess pays the remaining $6 million under identical coverage terms. If the primary policy excluded punitive damages, the excess policy would also exclude them, maintaining consistent coverage interpretation.

Etymology

The term emerged in commercial insurance in the mid-20th century, with 'follow form' indicating that the excess policy follows the same form and language as the underlying coverage.

Common Misspellings

Related Terms

More in insurance

Other insurance terms you should know

See Also