Umbrella & Excess Liability ​

In many industries the primary limits protecting your company may not be enough to give your business the protection it needs. Commercial Umbrella coverage increases your limits, helps bridge gaps, provides greater protection against claims and provides you with peace of mind so you can concentrate on growing your business.

The Insurance Services Office (ISO) Commercial Liability Umbrella is a stand-alone coverage form that contains its own coverage, exclusions, and conditions. It provides excess limits over General Liability, Automobile Liability, Employers Liability, and other underlying liability coverage forms or policies. In addition, and because it is a stand-alone coverage form, it may include coverage that underlying coverage forms or policies do not include or provide.

What Is Commercial Umbrella & Excess Liability Insurance?

Commercial liability umbrella coverage begins when your other coverage ends. Umbrella insurance provides protection over the limits of any other coverage forms. The most common underlying coverages are:

  • Commercial General Liability
  • Commercial Auto Liability
  • Workers Compensation / Employers Liability

Please be advised that the umbrella does not respond to a coverage unless the underlying coverage form also covers it.


What are the differences between Commercial Umbrella & Excess Liability Policies?

 Commercial Umbrella – The commercial liability umbrella coverage form is complete. It has its own insuring agreements, exclusions, conditions, limits, and definitions. It refers to the underlying coverage forms or policies but the insurance it provides is based on the coverage form itself.

Excess Liability – Excess policies are dependent policies. They are based on the underlying coverage instead of having their own insuring agreements, exclusions, conditions, and definitions. They do not add to that underlying coverage.

Why does my business need a Commercial Umbrella & Excess Liability Insurance policy?

Accidents are unpredictable, some accidents are small, yet others can be catastrophic. Limited Liability Company structure is designed to provide protection to businesses when it comes to such claims, however, if the corporate veil is pierced, for instance if the plaintiff can provide evidence that the LLC and business owner were inseparable, then the business owner can be held personally liable, leaving his personal assets open to seizure.

If you answer any of these questions yes, you might want to consider at least getting a quote.

  • Is our professional liability coverage that is in force, not sufficient to cover any payouts that are above existing coverage in case of a judgement in favor of litigants and the legal fees incurred to defend yourself in court?
  • Does my business have significant assets that might be required to sell off to cover a monetary judgement against your business not met by your insurance?
  • Is my company at a higher risk of claims because of my industry or services that we provide? Is my industry prone to or a target of litigation?

Some of the specific reasons businesses invest in Commercial Umbrella & Excess Liability policies:

  • Increased Litigation Settlements – Today’s primary limits may not be enough for claims that take years to settle. Lawsuits frequently exceed the standard $1,000,000 per claim limit when people get injured. Multimillion-dollar settlements are becoming much more common.
  • Increased Loss Trends – Advances in medical technology and prescription drugs have increased the costs of medical care, and new exposures with no historical loss experience (e.g., technology, foreign liability, identity theft, global warming) are on the rise.
  • Auto Exposure has increased – Auto crashes are the leading cause of umbrella claims. In the U.S., there’s one auto-related injury every 13 seconds and one fatality every 15 minutes. Cars are just as likely as large trucks to cause a severe accident, and driver distractions are growing due to interactions with phone calls, texting, and GPS.
  • Contractual Requirements – Umbrella policies allow you to respond quickly and more affordably to changes brought about by lease, job site, vendor, and municipal requirements.
  • It Ensures Business Continuity – Legal costs, judgment awards, and settlements outside existing policy limits can cripple a business. Consider who will pay defense costs, manage a large claim, manage a claim in a faraway jurisdiction, and find the right legal experts to handle a complex claim.
  • Industries with large presence – Your business’s prominence can make it a target for legal action, even when there’s a small percentage or question of actual liability.

How Much Does Commercial Umbrella & Excess Liability Insurance Cost?

Umbrella insurance typically increases the limit of the underlying policy in $1 million increments. The higher you raise your policy limit, the more you’ll end up spending on umbrella insurance. Small businesses usually purchase umbrella insurance to fulfill a contract calling for limits that are above the standard. Standard limits for insurance are:

  • General liability insurance: $1 million per-occurrence limit / $2 million aggregate limit
  • Commercial auto insurance: $1 million generic limit
  • Employer’s liability insurance: $1 million generic limit

The following factors can increase the cost of umbrella insurance:

  • Retail business that experience increased foot traffic, thereby, increasing the possibility a general liability lawsuit.
  • Business operates a fleet of heavily used commercial vehicles, thereby, increasing the possibility of a commercial auto insurance claim.
  • Your industry includes stressful or risky work that may lead to employer’s liability insurance lawsuits.

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