Commercial Umbrella Insurance
When a major liability claim exceeds the limits of your existing insurance, commercial umbrella insurance can help cover the gap. It provides extra protection on top of your general liability, commercial auto, or employer’s liability policies—offering peace of mind in high-stakes situations. This added layer of coverage can be essential for businesses facing large lawsuits or contractual insurance requirements.
What is commercial umbrella insurance?
Commercial umbrella insurance extends the liability limits of your underlying business policies. It kicks in after the coverage from your general liability, commercial auto, or employer’s liability policy has been exhausted. Some vendors or contracts may even require it to meet higher liability thresholds.
What does it cover?
Commercial umbrella insurance does not create new types of coverage, but it increases your liability limits for claims already covered by your underlying policies. This is often referred to as “follow form” coverage.
To be eligible for umbrella protection, you typically must list your underlying policies—such as general liability, business auto, and employer’s liability—on the umbrella policy. If a policy isn’t listed, claims related to it may not be eligible for excess coverage.
It can provide extra protection for:
Customer injuries
Property damage
Product liability
Auto accidents involving business vehicles
Example claims scenario
Your employee causes a serious accident while driving a company vehicle. A lawsuit results in $1.5 million in damages—but your business auto policy only covers $1 million. Without umbrella insurance, your business would be responsible for the remaining $500,000. With an umbrella policy in place, that gap would be covered.