How Does a Commercial Umbrella Policy Work?

Ever wondered what an “Umbrella” policy is and how it might apply to your business? A Commercial Umbrella policy gives you an extra (and potentially much larger) layer of liability coverage above your existing policies, to help protect your business in situations where accidents generate losses that exceed your primary policy limits.

For example, if your business has a $1 million limit on its General Liability coverage, adding a Commercial Umbrella policy with a $2 million limit of liability would effectively give you up to $3 million of overall liability coverage, subject to policy conditions, in the event of a covered loss. Umbrella policies can provide up to several million dollars in excess coverage for an additional premium, assuming that your business has exhausted available limits in the appropriate underlying coverages, such as General Liability, Commercial Auto, and Employers’ Liability policies.

Commercial Umbrella coverage isn’t just for big businesses. In today’s litigious environment, many types of smaller actions and accidents can lead to large liability judgments, such as a customer slipping on an icy walkway on your property, or an employee causing an accident that severely injures another driver while driving a company car. Without a Commercial Umbrella policy, your business may find itself on the hook for the large excess costs above your underlying policy limits.

For more information on insurance for your business, we encourage you to contact an Independent Insurance Agent. You can find an Independent Insurance Agent near you by clicking here.