Commercial Umbrella Insurance
Commercial umbrella insurance adds an extra layer of liability protection above the limits of a business's general liability, auto liability, and employers liability policies, paying out once those underlying limits are exhausted and, in many cases, covering some gaps those primary policies don't. The Allen Thomas Group recommends umbrella coverage for almost any business with meaningful public exposure, since a single serious lawsuit can exceed a standard $1 million liability limit far more easily than most owners expect.
How an Umbrella Policy Actually Pays
If a general liability policy has a $1 million per-occurrence limit and a jury awards $2.5 million in a lawsuit, the GL policy pays its $1 million and the umbrella policy pays the remaining $1.5 million, up to its own limit. Umbrella limits are typically sold in increments of $1 million, $2 million, $5 million, or more, and one umbrella policy can sit on top of several different underlying policies (GL, auto, employers liability) at once rather than requiring a separate umbrella for each.
Umbrella vs. Excess Liability
| Umbrella | Excess Liability | |
|---|---|---|
| Follows underlying form? | Not always, can broaden coverage | Strictly mirrors the underlying policy |
| Fills coverage gaps? | Sometimes, drop-down coverage | No, only adds limit |
| Typical use | Broader safety net | Pure limit increase, often cheaper |
Why the Cost-to-Coverage Ratio Makes This an Easy Decision for Many Businesses
Umbrella coverage is priced against the underlying limits it sits above, so an additional $1 million of protection is often available for a few hundred to a couple thousand dollars a year, which is inexpensive relative to what a single catastrophic injury, auto accident, or product liability verdict can cost. Businesses that operate vehicles, serve the public at a physical location, or work on other people's property are the ones most likely to see a claim exceed their primary limits.
How The Allen Thomas Group Can Help You
We'll help you understand exactly how commercial umbrella insurance affects your coverage and cost, then shop your policy across 15+ A-rated carriers to find the right fit.
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