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How Much Does Umbrella Insurance Cost?

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Umbrella Insurance Cost Analysis

In 2017, we analyzed cost data from more than 18,000 small businesses with 10 or fewer employees that bought coverage from us. We discovered that the average yearly cost of Umbrella Insurance, regardless of policy limits or industry, is $1,533, with a median cost of $960.

Here's a big-picture breakdown of what small businesses paid for their coverage. Keep in mind, Umbrella policy limits start at $1 million, so the following businesses have at least $1 million in coverage.


As you can see, more than half of small businesses (56 percent) were able to purchase an Umbrella Insurance policy that offers at least $1 million in coverage for less than $1,000 per year.

Now let's look at the average and median costs for Umbrella Insurance by the aggregate limit. For reference, an aggregate limit refers to how much a policy can pay toward claims during the coverage term (usually a year).

 

As you can see, cost tends to increase with the policy limits:

  • $1 million in coverage costs $1,234.35 on average ($960 median).
  • $2 million in coverage costs $1,544.97 on average ($915 median).
  • $3 million in coverage costs $2,637.44 on average ($2,328.50 median).

But limit isn't the only factor that can affect cost. A business's industry can also impact how much it pays for Commercial Umbrella Insurance coverage. 

 

Which Umbrella Limits Do Small Businesses Choose?

Now that we know the price breakdown by policy limit, let's see which limits small-business owners typically choose for their Umbrella Insurance policy.

The big winner is the $1M / $2M policy, which means the policy can pay up to $1 million for a single claim and $2 million for all claims made within a policy term (usually a year). A whopping 88 percent of customers bought this type of Umbrella Insurance from Insureon.

Here's a breakdown of what small businesses paid for a $1M / $2M Umbrella policy.

 

As the chart illustrates, the cost for a $1M / $2M Umbrella Insurance policy can vary quite a bit. While 33 percent of business owners paid less than $600 a year for their policy, almost half (47 percent) paid more than $1,000. Again, a business's industry can significantly impact insurance costs, so let's take a look from that angle.

 

Umbrella Insurance Cost by Industry

For the 88 percent of small-business owners who purchased an Umbrella policy with $1M / $2M limits, the median cost was $915. But remember, Umbrella Insurance is extra coverage on your existing General Liability, Hired and Non-owned Auto Liability, and Employer's Liability Insurance policies, so the price can vary based on your industry and other factors, just as it can on your other policies.

Let's take a look at the pricing for a $1M / $2M Umbrella Insurance policy by industry.

As you can see, higher-risk industries tend to pay more for their policy than low-risk ones. For example, construction and contracting companies typically pay an average of $2,410 for $1M / $2M in Umbrella coverage, whereas janitors and maids pay $1,130 on average.

 

Dig Deeper into Insurance Costs

Insurance costs vary based on the type of insurance a business buys. Learn more about how much each of these insurance policies cost for small businesses.

For an in-depth look at insurance costs by the industry, take a look at these cost analysis pages.