Commercial Umbrella Insurance
Primary policies like general liability and commercial auto have limitations to their liability coverage. For example, if the cost of claims exceeds the limits, a commercial umbrella policy increases the limits of the primary policies. Consequently, the business will not have to pay out of pocket. A commercial umbrella policy provides additional protection by paying for costs that exceed certain liability policy limits. The extra costs include legal costs, medical expenses, and damage and settlement costs.
Cost of Commercial Umbrella Insurance
The average cost of commercial umbrella insurance is based on the size of the company, the number of employees, claims history, underlying policies, experience, and sales.
What Commercial Umbrella Covers
Excess liability insurance increases the underlying limits of a plan without additional broad coverage, whereas commercial umbrella insurance has broader coverage that protects the company from liability claims.
You can purchase a commercial umbrella policy for your business once you have a primary policy.
The policies covered include
- General liability,
- Commercial auto and
- Employee liability- workers compensation.
The commercial umbrella is flexible since it extends the limits of the above policies, which may be from other insurers. For example, if a company car is involved in an accident during delivery, and the property damage and bodily harm exceed your business commercial auto limit, you will pay out of pocket without a commercial umbrella policy, causing massive financial damages.
However, with a commercial umbrella policy, it will cover claims of property damage and bodily harm. A commercial umbrella policy provides additional coverage on top of the general liability insurance you hold in simple terms.
Limits of Commercial Umbrella Insurance
It does not cover every claim and might not extend claims of some insurance policies. For example, commercial umbrella insurance does not cover business property claims. Suppose a fire damages your commercial property; the cost to repair your property will be out of pocket.
Who can purchase Commercial Umbrella insurance
- If you already have professional liability insurance, which might have limits on the coverage of legal fees
- Your business has assets that need protection.
- The nature of your business is high risk due to the products and services offered.
- Your profession is prone to litigation. For example, medical doctors have a higher chance of being sued than plumber.
With lawsuits being filed every day, you need to be aware of the coverage you have in each policy. A commercial umbrella will pay any excess liability that the standard insurance policy will not cover.