What is a Monoline Insurance Policy?

Last Updated:
May 7, 2024

What is a Monoline Insurance Policy?

Having adequate insurance to cover your business and potential risks is crucial so that you can continue to operate after any incident. Most businesses purchase package policies that include overall coverage, however, a monoline insurance policy may also be necessary. Keep reading to learn more about what they are and why they are beneficial.

What is a Monoline Insurance Policy?

A monoline insurance policy provides coverage for a risk that is typically included in a package policy but is excluded for a certain reason. One such example is when a business purchases a package policy but the underwriter excludes product liability, the business would then need a monoline product liability policy. It can also refer to an insurance policy that is not part of a package policy, but is offered with no supporting line by the insurance carrier. An example of this is a commercial umbrella liability policy which is not usually included in a bundle would be a monoline policy if the insurance company that underwrites your general liability is different from the insurance company that underwrites the excess general liability.

Examples of Monoline Insurance Policies

Essentially, using the definitions above a monoline policy could be almost any policy. However, the most common are below.

General Liability Insurance

Say a growing manufacturer purchases a high-risk general liability coverage from a specialized carrier. However, the carrier does not offer property coverage, so now the manufacturer needs to seek property insurance from another company. This means the manufacturer will purchase two monoline policies, a general liability policy, and a property insurance policy from two different carriers.

Employment Practices Liability Insurance

Often, higher rates of employment growth can lead to more employment disputes. Therefore, a start-up may opt for a monoline employment practices liability insurance policy due to its current size and potential for growth. Typical employment practices liability insurance coverage in package policies will not provide adequate coverage for these situations. Thus, the company is better off finding a specialty carrier that offers the most comprehensive coverage for this particular policy.

Workers Compensation Insurance

In the construction industry, the risk of workplace accidents increases, and some general liability policies do not cover workers compensation. This is why seeking a monoline workers compensation policy through a specialty insurance carrier is the best option. After all, you don’t want to lose your business due to a single on-site accident payout.

Advantages of Monoline Policies

Generally, a business will purchase a monoline insurance policy to cover exactly what they need which allows them to:

Cover gaps in policies

Many general liability packages and policies exclude extreme risks. This means you must purchase a monoline policy to cover anything specialized or unique to your industry

Cover large organizations

For larger organizations, it is unlikely that you will find a policy package that covers everything you need. After all, insurance carriers want to limit their exposure to large liabilities, and, thus, will not cover everything. When this occurs, the business must take out a monoline policy with another carrier to cover the excess.

In the current insurance market, a monoline policy is essential for businesses to feel confident in their coverage. While this can be expensive, it is well worth it in the event that an accident does occur. These insurance policy plans are a great way to leverage larger amounts of risk and protect your business.

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