Commercial umbrella coverage gives you extra liability coverage to help pay costs that exceed your general liability or other liability policy limits. Without this business insurance coverage, you’d have to pay out of pocket for expenses that cost more than your coverage limits, such as:
A commercial umbrella policy works a lot like personal umbrella insurance, except personal umbrella insurance increases the coverage amounts for your:
For example, if you’re in a car accident and the damages exceed your auto insurance limits, a personal umbrella policy can help cover the difference. Or, if you’re sued for your dog biting your neighbor, and their medical costs are more than your homeowners policy limits, umbrella coverage can help.
What Does a Commercial Umbrella Policy Cover?
A commercial umbrella policy provides extra coverage for certain types of liability insurance by extending your primary policies. That’s important because if you don’t have a policy in the first place, commercial umbrella coverage can’t extend it.
Insurance companies write umbrella policies with aggregate limits. These limits can range from $1 million to $2 million. This means your insurance company will only cover claims up to that amount.
It’s also important to know that umbrella insurance doesn't cover every type of liability claim, and it won't extend certain types of liability coverage.
For instance, if your accountant gets sued for making a mistake on an audit, professional liability coverage can help cover your defense costs. But if these legal costs exceed your professional liability policy limits, commercial umbrella coverage won’t cover the difference.
Who Should Purchase Commercial Umbrella Insurance?
Usually, the more your business interacts with clients and customers, the higher your liability risk will be. Your risks can be even greater if your employees use heavy machinery or dangerous equipment.
Business owners should consider commercial umbrella insurance if they think the cost of a claim could ever exceed their liability limits. Business umbrella insurance can be helpful if your business:
Frequently interacts with customers
Works on someone else’s property
Is open for the public to visit
If people can access your business or property, it increases the risk of bodily injury. For instance, wholesalers often work with machinery to restock shelves during business hours. Using this type of equipment around customers poses a risk of bodily injury, and you could face costly medical expenses and lawsuits that exceed your limits.
Commercial umbrella insurance would help with the costs for their medical expenses, lawsuits and judgments against your business. Without umbrella coverage to extend your policy, you would have to find a way pay for the amount it doesn’t cover. This can put your business and property at serious risk.
Frequently working offsite also creates an increased liability risk. Working at your customer’s house, for example, makes it more likely you’ll cause property damage, like accidentally putting holes in walls, breaking windows, or damaging cars. If that happens, business umbrella coverage can help cover the costs that exceed your liability limits.
How Much Does Commercial Umbrella Insurance Cost?
Your cost for commercial umbrella insurance depends on your:
Amount of underlying coverage
Type of business
Some industries face more risks than others, which can increase your cost for commercial umbrella insurance. For instance, if you have a construction business, your business umbrella coverage cost may be higher than a retail business.
How Does Commercial Umbrella Insurance Work?
Commercial umbrella insurance from The Hartford is flexible. It can even extend the liability coverage of policies you have with other insurance companies. So, if you have a general liability insurance policy from another insurance company, our commercial umbrella coverage can help cover costs that exceed that policy.
We can also make recordkeeping and bill paying easier if you have other commercial policies with us, like:
Commercial auto insurance
Business property insurance
General liability insurance
We can combine business umbrella insurance with your other policies into one simplified bill.