Reporting Requirements When PAP and PUP Are Written by Different Carriers

• By: The Big "I" Virtual University
• February 20, 2026

Q: What are the reporting requirements of a liability claim to the carrier that doesn’t write the underlying coverage? An example would be if a client has a minor car accident that was reported to and covered by their personal auto policy carrier but the personal umbrella policy carrier was never notified—and then, lo and behold, the client receives a lawsuit two years later.

Response 1: In the PUP, Section A: Duties in the Event of Occurrence, Offense, Claim or Suit says:

You, any Insured, or any person requesting coverage must do the following:

1. Notify us as soon as possible of the date and facts relating to any event, Occurrence, or Injury that is likely to involve this policy.

2. Immediately notify us of any Suit and provide any Suit papers and related documents received regarding an Occurrence or Injury.

What does this mean in practice? Point two is straightforward: If you learn of a lawsuit against your client, no matter how minor, you must notify the umbrella carrier immediately.

Point one requires more judgment: If you become aware of any incident that could potentially trigger coverage under the umbrella policy, you should notify the carrier as soon as possible.

Even as insurance professionals, it’s impossible to predict which claims might escalate or ultimately involve the umbrella policy. The safest solution, and the best practice, is to notify the umbrella carrier any time your client has a liability claim on an underlying policy.

Response 2: The PUP requires notice when it’s “likely” there will be a claim. On that basis, a clearly minor incident wouldn’t need to be reported unless and until it becomes obvious that it has escalated to something that might fall under the umbrella policy’s coverage. Of course, these policies are not uniform from one company to another, so you’d have to be familiar with the terms of each policy you sell. 

A best practice is to notify umbrella policies whenever there is an incident that might be covered, even if it appears minor. That has the advantage of bypassing a detailed analysis of the umbrella coverage—it’s a one-and-done operation. Even if the umbrella and the underlying carriers are the same, there may be different policy numbers and phone numbers for reporting and the adjusters.

Further, it covers an errors & omissions exposure if there’s a coverage dispute over the definition of the term “likely.” Your client probably won’t consider the necessity of making multiple reports for the same incident. Their attorney will probably argue that it was up to you to make reports to the appropriate insurers when the client makes a report to you.

Response 3: The policy requires reporting claims that are “likely to involve this policy.” That is open to interpretation, and I’d suggest that most insureds might not be good at predicting what is “likely” to involve an excess layer claim. In this case, when the lawsuit is received two years later, that suit may be the first indication that the event was “likely” to involve the excess layer policy. Since it is an actual lawsuit, the insured must report it to the excess layer insurer, as stated in the second item of Section A.

Having an excess carrier that is not connected with the underlying carrier or carriers is a complicating factor. An agent who has procured the underlying and excess layer coverages for an insured may have an obligation to the carriers represented by the agent to notify both carriers. The knowledge of the agent is imputed to the principal in the statutes or administrative codes in many states.

Response 4: Your agency needs a written procedure for when to report a loss to an umbrella carrier. even if it’s the same as the underlying carrier. Some agencies will report an incident—not a claim—for all liability losses. Some report anything that involves bodily injury, especially serious injury, death, loss of a limb or bodily function or loss of income. Some will also report any property damage of more than $50,000. Contact the carrier for their advice.

It is the insured’s responsibility to report a loss. If you take on this responsibility, then you will be responsible for any late reporting. This can be a serious E&O exposure.

Response 5: Ask your E&O carrier about best practices. Should all claims be reported—even if seemingly minor? Doing so gives the excess carrier an opportunity to monitor the primary carrier claim activities, and coverage is preserved. Or should they only be reported when serious and likely to involve the excess policy, or when a suit is filed?

When a claim is first reported, it often is a judgment call to determine if it’s likely to involve the PUP. But when a lawsuit is filed, that suit should immediately be provided to the excess carrier as is stated in the policy, and include the underlying carrier, claim number, adjuster name and contact data. 

Much depends on the particular fact pattern of the occurrence, the claim, the policy provisions and the statutes. Does your agency’s procedural manual state that the agency tracks claims activity, and thus, you might have known it was potentially going to affect the excess policy? Did your agency assume a duty to review? Was the underlying carrier on notice that there was an excess policy? Were the insured and defense counsel aware that it could penetrate primary and go to the excess, and that they should coordinate with the excess carrier?

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.