Commercial Umbrella Insurance
Commercial umbrella policies are usually used in conjunction with multiple underlying policies as a secondary form of insurance that bolsters the coverages of the underlying primary policies, such as a general liability policy, a commercial property policy, or a commercial auto policy. Commercial umbrella insurance policies can be used to fill in coverage gaps in underlying policies and extend coverage limits.
In general, businesses that need a commercial umbrella insurance policy:
- Need more liability protection and are on a budget
- Are required to carry a high liability policy limit to work with a certain client or government entity
- Have high liability risks, such as a high-traffic business location
- Want to cover exclusions in their existing liability policies
As a secondary, or supplemental, policy, a commercial umbrella insurance policy usually doesn’t provide coverage until the coverages of the underlying policies have been exhausted.
What Is the Difference Between Commercial Umbrella Insurance and Excess Liability Insurance?
Commercial umbrella and excess liability insurance are sometimes used interchangeably. However, the two types of insurance are not the same. While both commercial umbrella and excess liability insurance provide supplemental coverage, they differ in how many policies they enhance. Commercial umbrella policies usually are used in conjunction with multiple underlying policies. Excess liability insurance policies, in contrast, typically enhance only one primary policy.
Most excess liability policies are “follow form” policies, meaning their coverages and exclusions are identical to those of the underlying policy. Commercial umbrella policies, on the other hand, can have different coverages and exclusions, which is why they can be used to fill in coverage gaps.
What Businesses Should Consider a Commercial Umbrella Policy?
Many businesses stand to benefit from having a commercial umbrella policy. Some particular businesses that may want to consider a commercial umbrella policy include:
- Professionals, as legal defense fees can quickly exhaust a professional liability policy’s coverage
- Companies that have sizeable assets to protect, as they can be targets for lawsuits
- Companies that are in industries known for lawsuits (healthcare, manufacturing)
- Companies that are at high risk of being sued due to the services or products they provide
- Any business that would like more insurance protection than their primary insurance policies afford
Here are a few examples of businesses who may want to consider a commercial umbrella insurance policy:
- A retail operation with a busy storefront that wants to protect against the high cost of a customer injury lawsuit should there be a “slip and fall” on premises
- An IT firm that operates a fleet of vehicles, as the cost of several minor accidents could exceed its underlying commercial auto insurance policy limit
- A freelance videographer working with a company and using its expensive equipment, and the client asks you to increase your insurance policy limit in case you damage it.
Interested in learning more about a commercial umbrella insurance policy for your business? At Knight-Dik Insurance, we’ll work with you to design coverage that protects your business from a variety of risks, unique to you. For a free insurance premium analysis, simply contact us here or call 800-286-6353.
What Injuries Are Not Covered Under General Liability Insurance?
One of the most commonly used part of a general liability insurance policy is bodily injury liability, which covers medical expenses for those who are injured on a business’ property. Not all injuries are covered, however.
General Liability Protections for Small Companies Explained
As a small company, you may not think much about lawsuits or claims from customers. You work to provide a service or product to your customer and do your best at it. Yet, risk follows every company. Without general liability insurance, a small business is vulnerable to financial loss. In some cases, this can cause the folding of the company.
Commercial Auto Insurance for Your Employed Drivers
Today, business owners work with independent contractors to handle many of their specific needs. Yet, many also still use employees to handle tasks such as courier work or product delivery. When you have employees doing the work, you need to have insurance to protect those drivers and your assets.