Commercial Umbrella Liability Insurance

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Commercial Umbrella Liability (sometimes called Excess Liability Insurance) is a coverage written to cover your exposure to damages by third parties for bodily injury or property damage claims or for lawsuits that exceed your limits on your underlying policies. 

Essentially, Commercial Umbrella Insurance gives you the extra coverage you may need to help pay for costs that exceed the designated liability policy limits. An excess liability policy is no broader than the underlying liability policy; its sole purpose is to provide additional limits of insurance, and ensure you do not have to pay out of pocket for any significant costs you might be exposed to.

Commercial Umbrella extends the breadth of limits on the following commercial liability insurance policies:

Who Needs Commercial Umbrella Insurance Coverage?

Nearly any business can benefit from holding excess liability coverage that a commercial umbrella insurance policy will provide. Businesses that are exposed to more interactions with clients and customers on an in-person basis are the entities with the highest liability risk. If there is a risk inherent in your business that could exceed your liability limits, commercial insurance presents an effective mitigation strategy. Some companies such as Contractors will be required to carry higher limits by the person or entity that hires them to do a project.

It’s important for businesses to consider their budget and see if excess coverage is a sound investment. It’s a form of Risk Management. Aside from the cost aspect, certain industries or circumstances surrounding a business make it more subject to potentially needing commercial liability coverage. In general, the more your business interacts with the public, the higher your risk for liability tends to be.

The Hartford conducted a research analysis of small business claims throughout the course of a five year period. The study showed that unexpected events occur more frequently than small business owners realize. That’s why it’s so important to reach out to our advisors, who are so well versed in predicting the unexpected.

How Much Does Excess Liability Insurance Cost?

 Most Commercial Umbrella Policies are priced based on your underlying liability premiums. Many factors determine how much your commercial umbrella insurance policy will cost. Some of the most influential circumstances are :

  • The business size (employees, sales)

  • The type of business/industry

  • Amount of underlying coverage

Endorsements

Endorsements are used to modify the standard policy.  Some endorsements expand coverage while others limit coverage. These can be used to customize your insurance for your type of business. Some types of widely used endorsements are:

  • Additional Insured

  • Self -Insured Retention or deductible

  • Exclusion Endorsements to limit exposures and reduce pricing

  • Insurance Company Specific

Limits

The limits available vary but standard limits available start at $1,000,000 to $15 million. This means that your insurance coverage will only cover up to the amount of the limit you’ve designated.  Some policies will also contain one or more "aggregates".  Aggregates are the most a policy could pay in a year. 

What Does Commercial Umbrella Liability Insurance Cover?

A commercial umbrella policy can help cover claims for:

Bodily injury

Property damage

What Does Commercial Umbrella Insurance NOT Cover?

Commercial Umbrella coverage provides additional coverage to existing business insurance policies. It does not, however, extend coverage to all policies.

A major example is that Umbrella Insurance would not extend your commercial property insurance.