Jenkins Company purchased a commercial umbrella policy with a $10 mill

Jenkins Company purchased a commercial umbrella policy with a $10 million limit and a $100,000 self-insured retention.

The insurer required Jenkins Company to carry a $1 million per-occurrence limit on its general liability policy and a $1 million per-occurrence limit on its business auto policy. Jenkins purchased these required limits. A Jenkins driver was negligent while operating a company vehicle and killed another motorist. The court ruled that Jenkins must pay $5 million. How much of this amount will be paid by the umbrella policy?
A) $1.0 million
B) $3.9 million
C) $4.0 million
D) $5.0 million

ANSWER

Answer: C