Commercial Umbrella Insurance
Broaden your coverage.
Types of Coverage
What is Commercial Umbrella Insurance?
Also known as Excess Liability, Commercial Umbrella Insurance adds additional limits to underlying liability policies (i.e. General Liability, Business Auto, Professional Liability, etc). This type of coverage is designed to protect your business for exceptionally large events with a low probability of occurrence.
Think of Umbrella Insurance as a way of guarding your company against shock losses that could be financially devastating, another layer of protection to keep your business running with a peace of mind.
At times, it can provide coverage for areas of exposures that are not included on the underlying policy. Some underlying coverages can be excluded from your policies. For example, common exclusions include Employment Practices Liability or Sexual Abuse/Molestation. So, it’s important to know what is and isn’t covered in both your baseline policies versus your umbrella insurance. Unless it’s responding to a loss not covered by the underlying policy, your Umbrella or Excess Liability is triggered when the underlying limits are exhausted.
Coverage in Action
Your delivery driver is texting while driving and hits a car, resulting in fatalities and other bodily injury. The company is sued and found liable for a total of $3 million. You have a business auto policy with a $1 million per occurrence limit and a commercial umbrella policy with a total limit of $3 million. The Auto policy will be the first to respond to this lawsuit, using up the $1 million dollar occurrence limit as the underlying coverage. The umbrella insurance in this case will kick in, responding with the additional $2 million to cover the claim.
If you did not have enough in Umbrella or Excess limits, you would be responsible for the difference between what’s owed and how much insurance coverage there is to be paid out. Or, you did not have any umbrella insurance policy in place, you would have to pay the difference out-of-pocket for this lawsuit.