In today’s world, businesses and professionals are often required to meet specific insurance coverage limits to comply with contracts or regulatory demands. One such type of coverage that is becoming increasingly relevant is SAM coverage – short for Sexual Abuse and Molestation coverage. If you already carry a base policy that includes SAM, you might find yourself in a situation where you need more than the standard amount. This is where Excess SAM coverage comes into play.
What Is SAM Coverage?
Sexual Abuse and Molestation (SAM) coverage is a specialized form of liability insurance. It’s designed to protect organizations from claims related to sexual misconduct or abuse. SAM coverage is critical for industries that involve working with vulnerable populations, such as schools, healthcare facilities, childcare providers, and nonprofit organizations. Many general and professional liability policies include a SAM sub-limit, which places a cap specifically on abuse-related claims.
For instance, a policy might provide $1 million in general liability coverage, but only offer $250,000 or $1 million specifically for SAM-related claims. This can leave a coverage gap, especially if a contract requires higher limits.
Why You Might Need Excess SAM Coverage
Excess SAM coverage serves as an added layer of protection above the limits of your existing SAM policy. There are several reasons you might need it:
- Contractual Requirements
It’s common for contracts with government agencies, schools, or other institutional clients to require higher SAM limits than standard policies provide. For example, your base policy might include $1 million per occurrence and $1 million aggregate for SAM, but your contract could require $2 million. - Risk Management
Beyond contractual obligations, some organizations choose to carry higher limits as part of their internal risk management strategies. Given the severity and potential costs of abuse claims, having higher coverage can offer peace of mind and financial security. - Policy Sub-Limits
Even if you hold a strong general or professional liability policy, the SAM portion may have a sub-limit that doesn’t meet your needs. Sub-limits can restrict how much coverage applies to SAM-related claims, which can be problematic if the exposure risk is high.
How Excess SAM Coverage Works
Excess SAM coverage is written as an additional policy that sits on top of your existing SAM coverage. It does not replace your original policy; instead, it kicks in once the primary coverage limits have been exhausted. This ensures that if a claim exceeds your current SAM limit, the excess policy can cover the remaining costs up to its own limit.
Insurance carriers who offer excess coverage will usually require a copy of your current policy to understand the terms, limits, and sub-limits. Based on this, they can tailor an excess policy that meets your specific requirements.
A Practical Example
Let’s say you operate a nonprofit organization that serves children. Your current professional liability policy includes $1 million per occurrence and $1 million aggregate in SAM coverage. You’re bidding on a government contract that requires $2 million in SAM coverage. Rather than rewriting your entire policy, you can purchase an excess SAM policy that adds an additional $1 million on top of your existing coverage.
This way, your coverage meets the contract’s demands without having to overhaul your current insurance package. It’s a smart, targeted solution that helps you stay compliant and protected.
Access to the Right Markets
Not all insurance markets provide excess SAM coverage. However, specialized carriers do offer it, and an experienced insurance provider can help connect you with the right options. These carriers understand the unique needs of businesses that require higher SAM limits and can craft a solution that works for your specific situation.
Conclusion: Do You Need Excess SAM Coverage?
If you already carry SAM coverage but find your limits falling short of contract requirements, Excess SAM coverage might be the solution. It’s a cost-effective way to bridge coverage gaps, remain contractually compliant, and protect your organization from high-severity claims.
Reach out to your insurance advisor today to discuss your current policy and explore options for excess coverage. Don’t let a coverage gap jeopardize your business or its future opportunities – stay informed, stay compliant, and stay protected.