Standard business liability coverage will take care of you in most situations, but when serious situations arise, commercial umbrella insurance will help ensure that your business is protected. Learn what an umbrella policy is and how it works.
What is umbrella insurance?
Umbrella liability insurance protects you when accidents happen and your existing liability insurance policies cannot cover all the expenses. Essentially, it picks up where your business auto liability, general liability or other liability coverage stops, providing extra protection against bodily injury and/or property damage.
How commercial umbrella insurance works
A commercial umbrella policy serves two distinct purposes:
- It expands the limit that your company already has in its existing, or underlying, liability policies. If your general liability policy offers $1 million coverage per occurrence or $2 million total, you could expand those limits to $3 million per occurrence and $4 million aggregate with a $2 million umbrella policy.
- It broadens coverage for things that your underlying policies may not cover. If your auto liability policy covers accidents that might occur in a specific area, an umbrella policy could expand the coverage territory.
Customize your umbrella policy to fit your business
We can tailor commercial umbrella policies to the needs of different businesses. Owners of an auto body shop might need an umbrella policy to offer expanded coverage for garage liability, but a law practice that entertains clients might need expanded liquor liability limits.
When you talk with an agent to discuss umbrella insurance policies, you can request a quote that is customized to meet the specific needs of your business. Here’s what you need to provide in order to get a customized umbrella policy quote:
- The financial and operational details of your business.
- A copy of the declaration page of your current general liability and business auto insurance policy (if you have them).
- Any prior losses your company has experienced. Keep in mind that a loss doesn’t necessarily mean your premium will be higher.
- A list of the company’s officers, their positions and experience if they are different from the owners of record. Typically, the longer and more successful the company’s overall record, the better the risk for the insurer and the lower the premiums.
- Annual payroll and a breakdown of employees who are full-time, part-time, subcontractors or consultants.
Be sure to mention whether you carry professional liability, errors or omissions liability, liquor liability, employee benefits liability or employment practices liability insurance.