What Is Commercial Umbrella Insurance?
Commercial umbrella insurance provides additional protection if a claim exceeds the limits of your other liability policies. Without umbrella coverage, you would be responsible for paying any costs that exceed your policy limits, including legal and medical expenses, as well as damages to other people's property.
Commercial umbrella insurance can help protect your business from large, unexpected events that could have a devastating impact on your brand reputation and financial stability. While standard liability policies can provide some protection, there may be times when losses exceed what they can cover. By preparing for the worst-case scenario, you can help protect your company from damaging lawsuits, auto accidents, and product liability claims.
When Do Small Businesses Need Commercial Umbrella Insurance?
No matter the size of your company or how well it's run, your business faces the potential of a devastating claim arising from an unforeseen event. For example, let's say you own a retail store or apartment building, and a customer trips on the carpet and hits his head, sustaining a serious brain injury.
You could be potentially liable for millions of dollars in medical and other payments.
Would that entire sum be covered by your existing business liability insurance? Could your business savings and/or revenue make up for the difference in what's not covered?
If your answer is no, that's where Commercial Umbrella Insurance coverage comes in. Umbrella insurance goes above and beyond basic business liability insurance limits, offering up to $10 million of additional funds to manage situations just like this.
If you are a small business owner, you might think they can't take what you don't have. Think again—a court can seize the business assets you currently have and even allocate future earnings to satisfy a judgment against you.
It's never too soon to invest in umbrella coverage.
What Does a Commercial Umbrella Policy Cover?
A commercial umbrella policy can help cover this.
Bodily injury -Â like a customer getting hurt at your business (i.e, Slip-and-fall injuries)
Property damage that your business caused
Lawsuits from customers or employees with work-related injuries or illnesses
Be aware that commercial umbrella insurance adds an extra layer of protection to an existing underlying policy. You should have any of the following policies: general liability insurance, employer’s liability insurance, or commercial auto liability insurance. For example, if you don’t have a general liability insurance policy, you can’t get commercial umbrella coverage.Â
What Is Not Covered by a Business Umbrella Policy?
Commercial umbrella insurance doesn't cover all liability claims, and it also doesn't extend the limits of certain policies, such as commercial property insurance. Therefore, if your business property is damaged in a fire and the cost to replace and repair it exceeds your commercial property limits, you would need to cover the difference out of pocket.
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Who Should Purchase Commercial Umbrella Insurance?
The cost of commercial umbrella insurance can vary based on several important factors, including:
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The Size and Type of Your Business
Larger businesses or those in high-risk industries (like construction, trucking, or hospitality) generally pay higher premiums due to greater exposure. -
Coverage Limits
The more coverage you need, the more you'll pay. However, umbrella policies often offer excellent value for the added protection they provide. -
Number of Policies Covered
Your premium may increase if your umbrella insurance is layered over multiple policies (e.g., general liability, commercial auto, employer’s liability). -
Desired Coverage Amount
Umbrella coverage is typically sold in $1 million increments, so your cost will depend on how much additional protection you choose.
Tip: Commercial umbrella insurance is often one of the most affordable ways to increase your liability protection without raising the limits on every underlying policy.
The best way to find out your exact cost?
Request a personalized quote from G&G Independent Insurance. We’ll compare rates from 50+ carriers to find the right coverage at the best price.
How Much Does Commercial Umbrella Insurance Cost?
What Affects the Cost of Commercial Umbrella Insurance?
Several key factors influence how much you’ll pay for commercial umbrella coverage. These include:
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Business Size & Industry
Larger operations or those in high-risk industries (like construction or transportation) typically pay more due to greater exposure. -
Coverage Limits
The higher the umbrella limit you choose, the more you'll pay—but even large increases are usually cost-effective compared to base liability policies. -
Number of Underlying Policies
If you want your umbrella insurance to extend over multiple policies (e.g., general liability, auto, employer’s liability), that may affect the premium. -
Amount of Coverage Needed
Umbrella insurance is typically sold in $1 million increments, so your cost will depend on how much excess protection you choose.
The best way to determine your cost?
Get a personalized quote from G&G Independent Insurance. We’ll shop across 50+ carriers to find the best value for your business.
How Much Commercial Umbrella Insurance Do You Need?
Deciding how much extra liability coverage you need will depend on several factors, and an experienced independent insurance agent can help you decide what you need.
- What are the risks associated with your business? If your business mass produces products, provides advice or consultation, or has a hazardous work environment, you may be at a higher risk of being sued. These activities may warrant the purchase of an umbrella policy.
- What is the value of your business assets? Consider your company's real property, equipment, furniture, and other possessions. The higher the value of these assets, the higher the umbrella policy limits your business will need to protect your finances. You should have enough insurance to replace your company's total assets.
- How would the loss of future income impact you? It’s important to consider that a significant lawsuit could cost you more than your current assets. It could threaten your potential future income, too. Factor this in when deciding how much coverage you need on your umbrella policy.
What’s the Difference Between Commercial Umbrella Insurance and Excess Liability Insurance?
Commercial umbrella insurance doesn't cover all liability claims, and it also doesn't extend the limits of certain policies, like commercial property insurance. So, if your business property is damaged in a fire and the cost to replace and repair it exceeds your commercial property limits, you'd have to cover the difference out of pocket.
Prefer to Speak to a Service Agent?
We’re happy to answer your questions one-on-one and help you find the right coverage for your business.
If you're looking for statewide protection, check out our page for Commercial Umbrella Insurance in Arkansas to explore tailored solutions across the state. Or, request a free quote today and see how G&G can help safeguard your business.
