Is There a Coverage Gap When BAP and Umbrella Have Different Renewal Dates?

• By: The Big "I" Virtual University
• June 27, 2025

Q: A pallet manufacturing company has a business auto policy that renews in November and a commercial umbrella policy that renews in April. Does this cause any gap in coverage for the manufacturing company or possible errors & omissions exposure for the agency?  

​Response 1: If you keep the underlying policies updated on the umbrella, it shouldn’t cause any issues. Whenever possible, I try to make my clients’ policy dates align. It’s easier for the clients, for me as the agent and for the service team. Many carriers will offer lengthened or shortened terms to allow for this and it’s usually not too big of a headache for anyone.

I know you didn’t mention workers compensation, but if that’s part of the equation—and if you decide to make changes to line up dates—make sure that you’re not moving the workers comp dates, but rather moving everything else to match up to the workers comp renewal date. That way, you don’t end up with an experience modification change mid-policy term. That can be super tough to explain to a client who doesn’t understand how experience mods work.

Response 2: All policies with aggregate limits should have common effective and expiration dates. Most BAPs do not have aggregate limits of insurance, but commercial general liability policies, workers comp, employers liability insurance policies and excess liability policies should have common effective and expiration dates.

Response 3: I see no problem with the difference in these two dates. Umbrella concurrency wording says the limits of the underlying policies cannot be impeded or reduced by a claim before the umbrella effective date. But, since the BAP does not have any aggregate limit and instead has a per accident limit, the BAP would provide full coverage even if it had paid for other auto accidents prior to the umbrella’s effective date.

The major area of concern is the CGL, which does have aggregate limits. It is critical that the CGL and the umbrella share the same effective date. If the underlying policy has an aggregate limit, like a CGL, the umbrella insurer expects the full aggregate limit to be available during the umbrella policy period. 

Response 4: Assuming it is a standard ISO BAP, there is no aggregate liability limit, so there is no danger, as long as the auto limits equal or exceed the underlying limit required by the umbrella. However, from a total account management standpoint, it’s better to have a common expiration date for all policies that provide liability coverage.

Inform the insured of the benefits of having all liability coverages concurrent and document your recommendation with a signed or initialed form to get those policies changed to be concurrent, with underlying policies shown on the umbrella policy.

This question was originally submitted by an agent through the Big “I” Virtual University’s (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

This article is intended for general informational purposes only, and any opinions expressed are solely those of the author(s). The article is provided “as is” with no warranties or representations of any kind, and any liability is disclaimed that is in any way connected to reliance on or use of the information contained therein. The article is not intended to constitute and should not be considered legal or other professional advice, nor shall it serve as a substitute for obtaining such advice. If specific expert advice is required or desired, the services of an appropriate, competent professional, such as an attorney or accountant, should be sought.