Purchasing the right type of Commercial Auto Liability and Commercial General Liability insurance is critical in protecting your firm in the event of liability-related lawsuits. Part of the purchasing process involves determining the limits of your policy to adequately address your risk profile, but you can only buy up to a certain amount under these primary, underlying policies. In the event of a catastrophic loss that involves a serious injury or even death, the liability amounts may simply not be enough to protect your assets. That’s where Commercial Umbrella insurance comes in – to protect the significant business assets you have at risk.

Commercial Umbrella insurance provides excess liability coverage over various primary liability policies, such as the Commercial Auto policy, Commercial General Liability policy, Watercraft and Aircraft Liability policies, and other business policies that provide Liability coverage.

How Umbrella Insurance Works

Let’s say under your Commercial Auto policy you have $1 million in liability limits but a serious accident involving a company car results in injuries where you are found liable for $1.5 million. If you have $2 million in Umbrella insurance, your policy will kick in the remaining $500,000.

An Umbrella policy serves three purposes:

  • To provide excess limits when the limits of underlying Liability policies are exhausted by the payment of claims;
  • Can drop down and pick up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims; and
  • May provide protection against some claims not covered by the underlying policies. For example, an Umbrella policy may include worldwide coverage, which is often a broader coverage territory than found in the underlying Liability policies.

Do You Need A Commercial Umbrella Policy?

The key is to look at your exposures and potential liabilities you face every day. Consider the following:

  • Is your commercial property open to the public? When customers, vendors and others regularly visit your business, the chance of accidents and premises liability lawsuits increases.
  • Do your employees use their cars for business? If an employee gets into an auto accident while driving for work purposes, you could be liable for their damages.
  • Is there a high risk of occupational injury for your employees? Though Workers’ Compensation insurance should cover most work injury expenses, an employee could potentially sue you under the policy’s Employers Liability portion, alleging your negligence contributed to their injury.

If you answer yes to any of these, you may want to consider obtaining a Commercial Umbrella policy to bolster your protection.

Our professional staff at Preferred Insurance will help you assess your need for Commercial Umbrella insurance as well as how much additional Liability coverage makes sense for you to safeguard your business in the event of a catastrophic injury or accident.

Make Preferred Your Insurance Choice

The hallmarks of our success are our integrity, ethics, reliability and the value we place on our clients. We invite to learn more about us, and make Preferred your agency of choice. Give us a call at 888-943-5144 or email us at