Final answer:
In insurance law, the false statement about umbrella liability policies is that they have no exclusions. Umbrella policies provide additional coverage but do contain exclusions, though they offer broader coverage after specific minimum limits of primary policies are exhausted.
Step-by-step explanation:
The subject of this question is umbrella liability policies within the realm of insurance law. The correct answer to the question is option 'a' - there are no exclusions. This is false because umbrella liability policies, like all insurance policies, have exclusions that define what is not covered under the policy. While these policies provide broader coverage, they do not eliminate all exclusions.
Specific minimum limits for underlying coverage are often a requirement before an umbrella policy becomes active. These underlying limits are typically found in policies such as auto or homeowners insurance. Once the limits of these policies are reached or exhausted, the umbrella coverage acts as excess insurance, extending beyond the primary insurance coverage.
In certain cases, an umbrella policy may provide coverage for claims that the primary policy does not cover, which is referred to as 'drop-down' coverage. However, this coverage still comes with conditions and limitations. Thus, the presence of exclusions is a normal and expected feature of an umbrella policy. This is what makes option 'a' incorrect and not true of umbrella liability policies.