What is Commercial Umbrella Liability Insurance?

Commercial Umbrella Insurance provides additional liability coverage to help protect businesses against the potentially ruinous cost of claims. Think of your other liability coverages (like general liability or professional liability) as the raincoat and rain boots, with your umbrella providing an extra layer of protection for storms that would soak the other two.


When a business is the target of a lawsuit, significant assets can be at risk. If the cost exceeds the limits of a business’s underlying primary insurance policy, Commercial Umbrella Insurance extends an extra layer of insurance to protect business assets. Without Commercial Umbrella Insurance, business owners would be obligated to pay out of pocket for legal fees, medical bills, and damage expenses that exceed the limits of their underlying business coverages.

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What does Commercial Umbrella Insurance cover?

A Commercial Umbrella Policy covers expenses that exceed the limits of your primary, underlying liability insurance. For example:

  • You have a $500K General Liability policy. A customer slips at your store and fractures their spine. The cost of their surgery is 700K. Your Commercial Umbrella Insurance would kick in to cover that last 200K.
  • You have a $1M Professional Liability policy. An advertising error results in major lawsuits against your business. The cost of your lawyer, the damages brought against your company, and losses in sales exceed $1M, so your Commercial Umbrella policy kicks in to cover the additional cost.

How does commercial umbrella insurance work?

Umbrella policies are flexible. Typically they extend the liability coverage (limits) of the policies your business has with other insurance companies when necessary. It won’t kick in until you’ve surpassed the limits of your primary coverage.


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