Commercial Umbrella Insurance in the USA
Commercial Umbrella Insurance in the USA
What is Commercial Umbrella Insurance?
Commercial Umbrella Insurance is a type of liability coverage that extends the limits of your business’s underlying insurance policies, such as general liability, commercial auto, or workers’ compensation insurance.
What Does Commercial Umbrella Insurance Cover?
Commercial umbrella insurance supplements the liability limits of your existing business insurance policies. It provides additional coverage for bodily injury, property damage, legal costs, and certain lawsuits. If a claim exceeds the limits of your primary insurance, the umbrella policy steps in to cover the remaining costs.
Why Do Businesses Need Umbrella Insurance?
Businesses face many risks, including lawsuits, property damage, and injuries. A significant claim or lawsuit can exceed the limits of your standard liability coverage, putting your business assets at risk. Commercial Umbrella Insurance provides an extra layer of protection against large claims that could otherwise devastate your business.
For example, if your company is found liable for an accident that causes extensive injuries, and the settlement exceeds your primary insurance limits, an umbrella policy will cover the excess amount. Without this coverage, your business could be forced to use its assets or revenue to pay the difference.
How Does Commercial Umbrella Insurance Work?
Let’s say a client gets injured on your business premises, and they sue for $2,000,000. If your general liability policy covers $1,000,000, your commercial umbrella insurance will pay the remaining $1,000,000, ensuring your business remains protected.
How Much Does Commercial Umbrella Insurance Cost?
The cost of commercial umbrella insurance depends on several factors, including the size of your business, industry, and coverage needs. On average, businesses can expect to pay between $500 and $1,500 per year for $1,000,000 in additional coverage.
Who Needs Commercial Umbrella Insurance?
Businesses with valuable assets, significant revenue, or higher exposure to risk should consider commercial umbrella insurance. Industries such as construction, hospitality, and transportation, where accidents or lawsuits are more common, can particularly benefit from the additional coverage.
Benefits of Commercial Umbrella Insurance
Commercial umbrella insurance is an affordable way to protect your business from catastrophic claims that exceed your primary liability coverage. It ensures your business remains financially secure, even in the face of large lawsuits or unexpected events.