Commercial Umbrella and Excess Liability Insurance

the worst case scenario is not being prepared for the worst case scenario

As a business owner, you’re likely quite familiar with the standard types of insurance your business needs. Policies like General Liability Insurance and Commercial Auto Insurance, among others, can provide the coverage to protect your company in many everyday situations. Every policy, of course, has its limits. When an accident happens that incurs costs beyond what your business insurance covers, a Commercial Umbrella or Excess Liability Insurance policy can help ensure your business doesn’t get left high and dry. 

What is Commercial Umbrella Insurance?

Commercial Umbrella insurance is essentially like a backstop for the other policies your business holds, protecting it from lawsuits and other claims that go beyond their coverage limits. Say, for example, one of your customers trips and falls while visiting your shop, resulting in an injury requiring long term care. If your general liability policy coverage limit is $1 million and the customer sues for $1.5 million for the cost of that care, your business could be required to pay the $500,000 over the limit out of pocket. With a Commercial Umbrella policy, your business could be covered for that remaining $500,000.

What’s the Difference Between Umbrella Insurance and Excess Liability Insurance?

The terms ‘Umbrella Insurance’ and ‘Excess Liability’ insurance are often used interchangeably, even within the industry. While they’re indeed very similar, there are a couple of key differences between Umbrella and Excess Liability policies:

  • Excess Liability policies apply to a specific existing policy, while Umbrella policies can extend a range of existing policies your business might have.
  • Umbrella Coverage policies can cover claims beyond the existing policies they’re based on, while Excess Liability policies do not.

Our agents can help you determine which type of coverage makes the most sense for your business’ needs. 

Do I Need Commercial Umbrella Insurance?

It’s not uncommon for contract-based services businesses to purchase Umbrella policies to meet contracts that require liability limits above $2 million. Even if you don’t have a contract to fulfill, an Umbrella policy is still very much worth considering if your business could potentially be exposed to lawsuits. 

As a general rule of thumb: if your business is open to the public, your employees work on someone else’s property, or if they generally interact with the public as a part of their job, then your business could probably benefit from a Commercial Umbrella policy. 

What does Commercial Umbrella Insurance cost?

Because Umbrella or Excess Liability policies only kick in in extreme cases, the premiums tend to be lower than it would be to simply extent the limits of a General Liability policy. As with any type of insurance, the cost of a Commercial Umbrella policy can vary a bit depending on your industry, the nature of your business, your existing coverage limits, and the number of employees you have. It also varies depending on how much coverage you’re adding, with each $1 million in coverage usually adding to the cost. Generally speaking, most businesses pay less than $1,000 per year in premiums for commercial Umbrella coverage. 

Ready to get a quote? Talk to our agents today to get started with an Umbrella policy that fits your business’ particular needs.

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