Commercial Brokers of America

Commercial Umbrella Insurance

Get an additional layer of protection by supplementing your existing policy.

Commercial Umbrella insurance provided by Commercial Brokers of America.

Commercial umbrella insurance is designed to supplement existing insurance policies, giving you an additional layer of protection for your business. We’ll work with you to find the right umbrella solution to cover all your business needs.

Commercial umbrella insurance, or sometimes just called umbrella coverage, is a type of excess liability insurance policy that is broader than an ordinary excess liability policy. An umbrella policy can provide additional liability limits and protection to help cover costs of catastrophic claims and lawsuits when your business is found legally liable for losses. When the costs of such claims exceed the limits provided by your primary commercial liability coverages, the limits of the commercial umbrella policy “drop-down” to provide additional, or excess, limits of coverage.

An example of this would be if your business is found liable for a claim. Your commercial general liability limit is $1 million and the cost of the lawsuit is about $1.3 million. The cost of the lawsuit uses up the $1 million commercial general liability limit leaving you with $300,000 to pay, possibly out of pocket. This is where the umbrella policy kicks in. The commercial umbrella policy may be able to cover the remaining $300,000 of costs thus avoiding the need to pay out of pocket.

The main feature that distinguishes a commercial umbrella liability policy from a commercial excess liability policy is that the commercial umbrella liability policy may cover claims that are not covered by the underlying primary policies. For example, coverages that may be excluded on the commercial general liability policy may be included on the commercial umbrella liability policy. However, no two umbrella policies are the same. So if you are comparing umbrella coverages from different insurance carriers it is important to read the policy documents carefully.

The maintenance of the underlying liability policies is important. If the underlying liability insurance—like commercial general liability or commercial auto—is either cancelled or the limits are reduced, in the event of a large claim the umbrella acts as if the underlying policies are still in place. This means that in the example above, if the commercial general liability policy was cancelled and you were found liable for the claim, the umbrella policy would not “drop-down” and would only cover for $300,000 as if the $1 million limit commercial general liability policy was still there and that first $1 million would be paid out of pocket.

Not all liability exposures faced by a business are covered by an umbrella policy. For example, employers may face certain liability exposures which are not covered by a workers compensation or BOP policy, but are included in an employers liability policy or miscellaneous errors and omissions policy.

Commercial Brokers of America’s umbrella policy can provide coverage over eligible BOP policies and other qualifying business insurer’s primary policies. Umbrella policy limits can be purchased in increments of $1 million and can provide up to $3 million in additional coverage for qualifying businesses.

Having an insurance policy doesn’t mean you will be protected from harm, but it can help you keep your business open should your business experience a liability claim.

Like most insurance policies, commercial umbrella liability insurance cannot cover for all types of liability loss. Insurance policies will tell you what coverages are included and what isn’t through the exclusions. It is important to carefully review your policy. Contact us to review your insurance needs and policies to ensure you have the necessary coverages for your business.

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