What is the term for the deductible in liability umbrella policies?

The correct term for the deductible in liability umbrella policies is "self-insured retention." This concept refers to the amount that the policyholder is responsible for paying before the umbrella policy kicks in to cover any additional liabilities.

In the context of umbrella insurance, self-insured retention acts as a threshold. Once the loss amount exceeds this retention, the umbrella policy provides coverage. It is important for insured parties to understand this concept, as it determines their financial responsibility in the event of a claim. By requiring a self-insured retention, insurers may encourage policyholders to mitigate risks and maintain a level of responsibility for smaller claims.

The other terms listed do not accurately represent the deductible mechanism in liability umbrella policies. While "primary deductible" may refer to deductibles in certain types of policies, it is not the correct term for umbrella policies. "Excess liability retention" and "loss retention" also do not align with the accepted terminology for the deductible structure found specifically in umbrella insurance. Thus, recognizing "self-insured retention" as the correct answer is key to understanding how liability umbrella policies function.