Umbrella Insurance

Commercial umbrella insurance is a vital component of risk management for businesses, providing an additional layer of liability protection beyond standard policies. This article explores how commercial umbrella insurance works, its differences from excess liability policies, and the additional coverage it offers.

A commercial umbrella policy is designed to provide coverage that sits above multiple underlying policies. Instead of purchasing high limits on several individual insurance policies, a commercial umbrella policy offers broader protection. In the event of a claim, once the liability limit of an underlying policy is reached, the commercial umbrella policy activates, providing additional liability protection.

It is important to note that commercial umbrella insurance differs from an excess liability policy. While an excess liability policy typically extends coverage over a single policy, it does not offer the same breadth of protection as a commercial umbrella policy.

Commercial umbrella insurance helps businesses avoid out-of-pocket expenses for claims-related costs that exceed the limits of their general liability, commercial auto, or employer’s liability policies. Some examples of the expenses covered by commercial umbrella insurance include:

• Legal costs

• Medical bills

• Damage to other people’s property

• Judgments and settlements when your company faces a lawsuit

By understanding the workings and benefits of commercial umbrella insurance, businesses can better protect themselves against unforeseen liabilities and ensure comprehensive coverage for their operations.