Commercial umbrella insurance is a type of liability insurance that provides additional coverage beyond the limits of other liability policies, such as commercial general liability or commercial auto liability. This type of insurance is important for businesses of all sizes and industries, as it can provide an extra layer of protection against potentially devastating financial losses.
One of the main reasons why commercial umbrella insurance is so important is that it can help to protect a business from the high costs of lawsuits. If a business is sued and the damages awarded exceed the limits of their other liability policies, the business may be responsible for paying the difference out of their own pocket. Commercial umbrella insurance can help to cover these additional costs, so that a business is not financially ruined by a single lawsuit.
Another important aspect of commercial umbrella insurance is that it can provide coverage for certain types of claims that may not be covered by other liability policies. For example, some commercial umbrella insurance policies may provide coverage for claims related to defamation, invasion of privacy, and certain types of advertising injuries.
Related: Personal Umbrella Policy
What Does a Commercial Umbrella Insurance Policy Cover?
Commercial umbrella insurance policies cover medical expenses, property damage liability, attorney fees and damages when your business is facing a lawsuit. Business umbrella policies typically have higher limits of liability than other liability policies, often starting at $1,000,000 or more. The coverage limit is typically purchased in increments of $1,000,000, and the premium is usually a small percentage of the limit of coverage.
These policies generally add coverage to:
- General Liability Insurance
- Commercial Auto Insurance
- Employer’s Liability (part of Worker’s Compensation)
Forms can vary by carrier and can be based on the underlying policy, so it’s important to work with an insurance agent who understands the specific risks and exposures associated with your business. This will help to ensure that you have the appropriate coverage in place to protect your business from financial losses.
Related: More info from PropertyCasualty360
What is Not Covered by a Commercial Umbrella Policy?
Again, the policies may vary, so you want to review the specifics with your agent, but common exclusions include:
- Professional Liability (Errors & Ommissions)
- Employment Practices Liability (EPLI)
- Business Property Insurance
- Contractual Liability
- Injuries to Employees
- Aircraft & Watercraft
What are Some Examples of Commercial Umbrella Insurance Coverage?
Here are a few specific examples of insurance claims that may be covered by these policies:
- A guest who is injured in a slip and fall accident on the hotel’s property sues the hotel. The guest’s medical expenses and lost wages amounts to $2.5 million, but the hotel’s general liability policy only has a limit of $1 million. The hotel’s commercial umbrella policy ($3 million limit) provides the additional $1.5 million in coverage, allowing the hotel to fully cover the costs of the settlement.
- A construction company is sued by a neighboring property owner for damages caused by a covered peril from the construction site. The damages were estimated at $3 million, but the construction company’s commercial general liability policy only has a limit of $2 million. The commercial umbrella policy provides an additional $1 million in coverage, which helps the company settle the lawsuit.
- A restaurant is sued by a customer who claims that the food served at the restaurant caused them to become ill. The customer seeks $1.5 million in damages, but the restaurant’s general liability policy only has a limit of $1 million. The commercial umbrella policy provides an additional $500,000 in coverage, which helps the restaurant to settle the lawsuit.
- The employee of your plumbing company hits another vehicle and causes serious injuries while on the way to a plumbing job. The other driver sues your business for $2 million in injuries and lost wages. However, your company’s general liability policy only has a limit of $1 million. The commercial umbrella policy provides an additional $1 million in coverage, which helps the company to settle the lawsuit.
Please note that these are fictional examples, and should not be used as reference to any real cases.
Who Should I Contact to Get a Commercial Umbrella Quote?
There are several different ways to get a business umbrella insurance quote. Some companies offer these quotes online. However, working with an insurance agent is the best option. An agent can discuss aspects of your business to make sure you have considered everything that you need to in your insurance program.
Our team at Think Safe Insurance is here to help. Since we are independent agents, we work with many different companies to make sure that we can get the best coverage for you and your business. Give us a call at 813-425-1626 or request a quote online.
In summary, commercial umbrella insurance is a type of liability insurance that provides additional coverage beyond the limits of other liability policies, such as general liability or auto liability. It can help to protect a business from the high costs of lawsuits, and provide coverage for certain types of claims that may not be covered by other liability policies.
It’s important for businesses to work with an insurance agent who understands the specific risks and exposures associated with their business and to have certain minimum amounts of liability insurance in place to qualify for commercial umbrella insurance.