Mike McLean June 20, 2023 3 min read

Anti-Stacking Provisions (Endorsements)

Anti-stacking provisions fine print

Endorsements/policy anti-stacking provisions are meant to avoid the application of multiple sets of policy limits, deductibles, or retentions to a single loss. Each provision/endorsement is different and the specific policy language must always be consulted. These provisions are becoming more prevalent with the market hardening as well as the ability of losses to potentially tap into multiple policies (and by consequence those limit structures and aggregates). The provisions typically stipulate that, in the event of a loss under multiple policies, only one policy limit and/or retention/deductible, will apply.  The most common types of anti-stacking provisions are horizontal stacking and vertical stacking.

SVB, remote work, and… PR?

2023 Startup Risk Index Report
Based on a survey of over 500 VC-backed startup founders in the U.S., the report shows what they’re most worried about this year, what they’re doing about it, and what they aren’t.

Download the Report

What Is Horizontal Stacking?

This type of provision states that the policy limit will not be increased by the number of policies or insureds involved in the loss. So, if there is a loss under two policies each with a $1M limit, the most the insurer will pay is $1M.

What Is Vertical Stacking?

Business owner researches what are anti-stacking provisions?This type of provision states that the policy limit will not be increased by the number of occurrences involved in the loss. So, if there is a loss under two policies each with a $1M limit and the loss consists of two occurrences, the most the insurer will pay is $1M. While anti-stacking provisions can be useful in certain situations, they may also have some unintended consequences. For example, Law Insider explains that if there is a large loss that involves multiple insurers and policies with different limits and retentions/deductibles, it may still be necessary to apply those limits to reach the total amount of damages. Additionally, in some cases, it may be difficult to determine whether a loss is one occurrence or multiple occurrences.

Overall, it is important to carefully review any anti-stacking provisions that apply to your policies and understand how they will impact you in the event of a loss. To ensure that you are fully protected, it may be necessary to purchase additional insurance or negotiate different policy terms.

Examples of Anti-Stacking Provisions that Could Apply to a Loss

Given the above definition of anti-stacking provisions/endorsements, let’s take a look at how these might practically apply to losses.

1. One policy limit will apply per loss, regardless of the number of policies or insureds involved.

2. One policy limit will apply per occurrence, regardless of the number of policies or insureds involved.

3. Only one deductible will apply per loss, regardless of the number of policies or insureds involved.

4. Only one retention will apply per loss, regardless of the number of policies or insureds involved.

5. The policy limit will not be increased by the number of policies or insureds involved in the loss.

6. The policy limit will not be increased by the number of occurrences involved in the loss.

7. In the event of a loss under multiple policies, only one policy limit will apply.

8. In the event of a loss under multiple policies, only one deductible will apply.

9. In the event of a loss under multiple policies, only one retention will apply.

10. Multiple policy limits will not be combined to increase the total amount of coverage available.

Overview: Anti-Stacking Provisions

Endorsements will likely be included in any policy you have, whether you have startup insurance or small business insurance, or coverage for something very specific like Tech E&O for your software company. If you’re looking for additional resources beyond these, check out some of these top articles for your company:

Back to Insurance Glossary

Related Articles

A person walks down the street holding a to-go cup of coffee or tea. They're probably looking forward to reading an essential it consultants insurance guide. Probably.
The Essential IT Consultants Insurance Guide

The Essential IT Consultants Insurance Guide

5 min read

IT professionals help set up computer systems, monitor digital security, and improve functionalities for a wide variety of clients. They’re also often called when there’s a problem. So, if something goes wrong, IT consultants need to make sure that they have insurance policies in place to keep them protected. That’s why we’ve created this IT […]

Read More
Embroker Announces New Consultants Insurance Program

Embroker Announces New Consultants Insurance Program

3 min read

Embroker is thrilled to announce the launch of our newest vertical insurance program, designed specifically to meet the unique needs and risks faced by consultants. This comprehensive coverage program is now available on our ONE platform, offering a streamlined and transparent insurance buying experience for consulting professionals. Consultants play a vital role in helping businesses […]

Read More