Jenkins Company purchased a commercial umbrella policy with a $5 million limit occurrence. The insurer required Jenkins Company to carry a $2 million per-occurrence limit on its product liability policy with a $100,000 self-insured retention and a $1 million per-occurrence limit on its business auto policy with a $50,000 self insured retention. During the policy period, Jenkins incurred the following two losses:

Loss one: Jenkins was sued by the customers who were injured by its product. Jenkins lost the lawsuit and was required to pay $5 million to the injured customers.

Loss two: A Jenkins driver was negligent while operating a company vehicle and killed another motorists. The court ruled that Jenkins must pay $1.5 million.

How much of these two losses will be paid by the umbrella policy?

1. $6.5 million

2. $3.35 million

3. $5.7 million

4. $5 million