Commercial Umbrella Insurance

Commercial umbrella insurance provides additional liability coverage when a covered claim exceeds the limits of certain underlying insurance policies, subject to the umbrella policy's terms and conditions. Without sufficient liability protection, a business may be responsible for covered claim expenses that exceed its available insurance limits.

This can include:

• Legal costs
• Medical bills arising from covered liability claims
• Damage to other people's property
• Covered judgments and settlements

A commercial umbrella policy may extend the liability limits of eligible underlying policies, such as commercial general liability insurance and commercial auto liability insurance. The policies that qualify for coverage depend on the insurer and the terms of the umbrella policy.

For example, suppose your business faces a covered liability claim totaling $1.5 million, while your underlying liability policy provides a $1 million limit. If your commercial umbrella policy applies to the claim, it may help cover the eligible $500,000 difference, subject to its limits, exclusions, and other policy conditions.

• General liability insurance
• Employer's liability insurance, which may be included as part of a workers' compensation insurance program
• Hired and non-owned auto liability insurance

Insurers typically require businesses to maintain specified minimum limits on eligible underlying policies before commercial umbrella coverage can apply. These requirements vary by insurer and policy, so confirm the required limits when evaluating coverage options.

Commercial umbrella insurance does not automatically cover every type of business liability. Professional liability insurance, which may address claims involving professional errors, omissions, or failures to deliver contracted services, is generally handled separately. Review policy terms with an insurance professional to understand which underlying policies and claims are eligible for umbrella protection.