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.