Commercial Umbrella Insurance

The Commercial Umbrella policy is an economical way for a business to increase the liability limits of their underlying policies such as Business Owners and Commercial Auto. This increase provides a level that is adequate to accommodate the exposure or because a contractor requires the higher limit.

In most cases, the commercial insurance policy has an established limit of one or two million dollars. When the traditional limit is not sufficient, an umbrella of liability can be used to increase the standard limit to various other higher limits depending on the Umbrella insurance carrier selected. If, for example, your company that provides marketing services is contracted by a product manufacturer to provide those services, it is highly likely that the product manufacturer will require $5 million in liability limits rather than the standard $1 million that your current policies offer. When you add your $4 million dollar umbrella policy to your portfolio, the total limits available are increased to $5 million dollars.

If your business is offering products or services to high net worth clients, governmental organizations or large corporations, the Umbrella policy will always be required to accommodate the limits these clients require. It makes very good sense to have this Umbrella in place before targeting these types of clients so that you will not have to scramble to get the necessary insurance in place at the last minute.

Although commercial umbrella and excess liability terms are frequently used interchangeably, they are not identical policies. The umbrella policy frequently offers coverage that is not available in an underlying policy where the excess liability policy provides only the coverage in the underlying policies.The business owner should also be on the lookout for language containing the term "following-form”.This means the policy does not define coverage, but simply states that it only applies if coverage is available in the underlying policies.

Commercial umbrella coverage is especially practical when it comes to commercial auto liability. Most commercial auto carriers will offer limits of $2 million dollars or less, and this is simply not sufficient coverage in many cases. If, for example, your business regularly has high-net-worth clients traveling in your company owned vehicle(s) as a passenger, your $2 million auto limit may be insufficient to cover the company’s liability after an at-fault accident.

It makes very good business sense to protect your business sufficiently and the capital that you’ve invested, contact us today for expert advice from an experienced agent.