Umbrella insurance provides an extra layer of liability protection by covering costs that exceed your other liability coverage limits. Your general liability, business auto and workers compensation policies are your first line of defense but when you need additional protection on a claim that exceeds the limits of your primary policy, an umbrella policy can help pick up the slack.
WHAT DOES UMBRELLA INSURANCE COVER?
It covers the same types of costs as general liability or business owners coverage, such as medical expenses, legal costs, bodily injury and property damage.
Notable: Umbrella insurance provides additional coverage on top of your other liability policies. If you don’t have other liability policies, you won’t be able to obtain a business umbrella policy.
- A customer trips on a step at your restaurant and sustains injuries that leave them with a severe back problem. To recoup the costs of their medical expenses, the customer sues you for $3,000,000 and your general liability limit is only $2,000,000.
- An employee sues you over a chronic shoulder injury they received from lifting heavy equipment while working for you. Business umbrella coverage can cover the cost of hiring a lawyer.
- On the way to a jobsite, your employee causes a pile up in your business vehicle. The other drivers sue your business for compensation in the amount of $1,500,000 and your business auto limit is $1,000,000.
- Your employee installs something incorrectly in a client’s home, causing extensive water damage. The damage to the building and contents is significantly more than your general liability limit.
WHAT DOES UMBRELLA INSURANCE NOT COVER?
It doesn’t cover every type of claim and it does extend over property policies.
Example: Let’s say a fire causes significant damage to your business personal property. The cost to replace your damaged property exceeds your commercial property limits. You would have to cover the difference out of pocket because an umbrella does not cover property losses.
WHO SHOULD PURCHASE BUSINESS UMBRELLA INSURANCE?
Everyone with liability insurance! In particular businesses that frequently interact with customers, work on others’ property or allow the public to visit their premises carry higher liability risks. If your business owns a lot of vehicles or is involved in hazardous work, umbrella insurance is a good safety net.
Notable: Working offsite can increase your business’ liability risks. If your employees are working at a client’s house, there’s a higher risk of property damage.
WHAT TYPES OF LIMITS ARE AVAILABLE?
Insurance carriers typically write umbrella policies in $1 million increments. These limits can range anywhere from $1M to $15M.
HOW MUCH DOES BUSINESS UMBRELLA COVERAGE COST?
Umbrella insurance costs can depend on many factors including: amount and types of underlying coverage, vehicle fleet size, type of business, location, business size, gross receipts and more. The best way to see how much an umbrella policy might cost is to reach out to one of our agents for a quote.