What Is Commercial Umbrella Insurance?

Commercial umbrella insurance adds extra liability coverage on top of your business's other liability policies, like general liability, commercial auto and employer's liability. When a covered claim uses up the limit on one of those policies, the umbrella can pay the rest, up to its own limit. Businesses often carry it to meet contract requirements or to cover large claims. Tivly can match you with a partner from our network of 450+ insurance partners.

What Does Commercial Umbrella Insurance Cover?

An umbrella extends the liability coverage you already have. Depending on the policy, it can help pay for:

1. Bodily injury and property damage claims that go beyond your general liability limit
2. Auto accident claims that go beyond your commercial auto liability limit
3. Employee injury lawsuits that go beyond your employer's liability limit
4. Personal and advertising injury claims, such as libel or slander
5. Legal defense costs for covered claims

Some umbrella policies also cover certain claims the underlying policies don't. This is sometimes called drop-down coverage, and it varies by policy.

How Does Commercial Umbrella Insurance Work?

Say a customer is badly hurt at your business, and a court awards more than your general liability limit. Your general liability policy pays up to its limit first. Your umbrella then pays the remaining amount, up to the umbrella's limit. Without the umbrella, the business would owe the difference.

An umbrella doesn't replace your other policies. It only pays after an underlying policy reaches its limit, and insurers usually require minimum limits on those policies before they'll write an umbrella.

What's the Difference Between Umbrella and Excess Liability?

The terms are often used interchangeably, but they aren't the same. Excess liability insurance adds limits that follow the exact terms of the policy underneath it. An umbrella adds limits across several policies, and some umbrellas are broader than the policies below them. Your insurance partner can tell you which one a quote is.

What Isn't Covered by Commercial Umbrella Insurance?

Commercial umbrella policies commonly exclude:

1. Professional liability and errors and omissions claims
2. Damage to your own property
3. Workers' compensation benefits (the umbrella can sit above employer's liability, but not the benefits themselves)
4. Pollution claims
5. Cyber and data breach claims
6. Intentional or criminal acts
7. Contract penalties

Some states also limit coverage for punitive damages. Exclusions vary by insurer, so review the policy before you buy.

How Is Commercial Umbrella Insurance Different From a Personal Umbrella?

A commercial umbrella adds limits to business policies, like general liability, commercial auto and employer's liability. A personal umbrella adds limits to an individual's home and personal auto insurance. Business owners often need both, since a personal umbrella generally won't cover business claims.

Who Needs Commercial Umbrella Insurance?

A commercial umbrella is worth considering if your business:

1. Has contracts that require higher liability limits than your policies carry
2. Has customers or visitors on site regularly
3. Works on other people's property, like contractors and home service businesses
4. Has vehicles on the road, especially a fleet
5. Has employees in physically demanding jobs
6. Has significant assets that a large lawsuit could put at risk

How Much Commercial Umbrella Coverage Do I Need?

Start with what's required of you. Client contracts, leases and project bids often set a minimum total liability limit. Beyond that, consider the size of claims in your industry, how many vehicles and employees you have, and the value of the business assets you want to keep safe from a lawsuit. A Tivly partner can help you review your contracts and choose a limit.

What Affects the Cost of Commercial Umbrella Insurance?

1. The umbrella limit you choose. Higher limits raise the premium.
2. Your industry. Work with more risk of injury or property damage is rated higher.
3. Your vehicles. More vehicles, and heavier ones, add exposure.
4. Your employees. More employees mean more potential claims.
5. Your underlying policies. The limits and terms of the policies below the umbrella matter.
6. Your claims history. Past large claims can raise your rate.

How Do I Get a Commercial Umbrella Quote With Tivly?

1. Fill out the form above or call 877-907-5267.
2. Tell us about your business, your current liability policies and any limits your contracts require.
3. Our team matches you with a partner from our network of 450+ insurance partners, who can quote your business directly.

Reviewed By: Sarah Reid, Licensed Agent