Commercial umbrella insurance, or umbrella excess liability insurance, provides an extra layer of security for your business. It is supplementary coverage for the costs associated with lawsuits, legal fees and settlements, and it is appropriate for any company that needs additional liability coverage.
When might you need additional liability coverage for your business? What if your business is named in a liability claim and you are required to pay a $2 million settlement? You probably have general liability coverage, but the limit is $1 million. Where will the additional $1 million come from to pay the settlement amount? Would you have to liquidate your business assets in order to pay?
You come into contact with numerous suppliers, partners and other business associates every day, and each of these relationships involves a certain amount of risk to your business. Your existing commercial insurance policies probably do not provide sufficient coverage to protect you in every case in which you face some type of liability exposure. In cases where your coverage is insufficient, you need commercial umbrella insurance.
What Does Commercial Umbrella Insurance Cover?
Commercial umbrella insurance provides protection for costs stemming from lawsuits, legal fees, court awards and out-of-court settlements. These can amount to far more than what is covered by your general liability or other commercial insurance policies. Commercial umbrella policies typically provide $1 to $5 million in excess liability coverage, and are appropriate for business owners with significant assets or who may be susceptible to lawsuits.
Umbrella insurance offers an added layer of protection to any of several other policies you might have, including commercial general liability, employer’s liability, and hired and non-owned auto liability. It is an affordable way to get higher policy limits on several other small business insurance policies, rather than raising the liability limits on each of your other policies, which would be far more costly.
Most commercial umbrella policies exclude protection for errors and omissions claims, professional liability, product recalls, workers’ compensation claims and coverage for asbestos-related claims, pollution, war and terrorism.
The amount of commercial umbrella coverage you need depends on the type of business you own, the amount of coverage you already have and the amount of business assets that could be at risk if you are sued. We will work closely with you to assess the risks you face and obtain the right amount of coverage.
Do you have commercial umbrella insurance as part of your business insurance package? Will your other policies provide sufficient coverage if you are sued?
