Commercial & Business Umbrella insurance

What is Commercial Umbrella insurance ?

Commercial Umbrella Liability is a type of casualty insurance designed to provide protection against catastrophic liability claims that may exceed the policy limits of a customer’s primary commercial general liability (CGL) coverage under a traditional business insurance policy, business auto policy (BAP) and other business insurance solutions. It is a cost-effective way to significantly increase liability limits to guard against catastrophic claims in an uncertain world.

How does Commercial Umbrella Liability insurance work?

The commercial umbrella liability policy provides higher liability limits when an insured’s underlying liability policies are exhausted due to a large liability loss or court judgment. In some cases, an insured may also have a self-insured retention (SIR) over which an umbrella liability policy may be written. If a loss exceeds both the base policy limits and the self-insured retention, the umbrella liability will respond.

For example, assume a company has a business insurance policy with a general liability limit of $1 million. If the customer experiences a $3 million loss or court judgment, the $1 million limit would immediately be exhausted, leaving $2 million as the customer’s responsibility. However, if the customer had purchased an umbrella liability policy with a $5 million coverage limit, that additional $2 million would be covered under the excess policy.