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Commercial umbrella insurance for real estate businesses and rental properties

Umbrella / excess liability insurance icon

Commercial umbrella insurance

Once a policy’s limit is reached, commercial umbrella insurance provides additional coverage for liability claims made on general liability, commercial auto, or employer’s liability insurance.

Umbrella insurance boosts your liability coverage limits

The costs of a lawsuit against your real estate business can quickly add up – even to the point where your insurance coverage isn’t enough to cover it. Commercial umbrella insurance, similar to excess liability insurance, can pay for claims that exceed the limit on your liability policy.

An umbrella insurance policy can boost the coverage limits of your:

Most real estate businesses purchase umbrella insurance to satisfy client contracts that require policy limits higher than $2 million.

How does umbrella insurance work for real estate businesses and rental property owners?

Umbrella insurance activates when the limits are exhausted on the underlying policy.

For example, say your employee fails to use a wet floor sign after mopping the office floor. Your client slips and falls, suffering a serious head injury that leaves them unable to work for months. The client sues you for $2.5 million in damages.

If your real estate business has general liability insurance with a $2 million per-occurrence limit, that policy would cover the first $2 million. Then your umbrella policy would kick in as supplemental insurance and cover the remaining $500,000.

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What type of coverage can commercial umbrella insurance provide for real estate professionals?

A commercial umbrella liability policy simply mirrors the coverage of the underlying policies, which may include:

General liability coverage

Umbrella insurance/excess liability insurance provides coverage after you reach the limit of your general liability policy. It can help cover legal costs and medical bills related to:

  • Customer bodily injuries, such as from a slip-and-fall accident
  • Customer property damage
  • Advertising injuries, such as slander and libel
  • Copyright infringement

Umbrella coverage will also cover claims on the general liability portion of a business owner’s policy (BOP), which bundles general liability insurance with commercial property insurance at a discount.

Commercial auto insurance

The cost of a car accident involving multiple vehicles can go sky high if the other drivers sue for damages. Having car insurance is a must in order to protect yourself financially. 

Real estate umbrella insurance covers liability claims that exhaust the limits on your commercial auto policy. It also extends coverage on hired and non-owned auto insurance for real estate professionals who drive their own vehicles for work purposes.

If you or one of your employees gets into an auto accident, it can cover legal costs related to:

  • Injuries caused to others
  • Damage to another person’s vehicle
  • Other third-party property damage

Employer's liability insurance

Being in real estate can involve physical work, which is why umbrella insurance is a recommended policy for professions like commercial landlords, property managers, and real estate agents. If one of your employees blames an injury on a lack of proper equipment or other negligence, they could sue.

When an employee lawsuit over an injury escalates and exceeds the limits on employer’s liability insurance (usually included in workers’ compensation insurance), a commercial umbrella policy kicks in to cover the remaining defense costs. It adds an extra layer of protection to your existing coverage.

Umbrella insurance does not cover:

  • Professional liability lawsuits (for this, look to excess liability insurance)
  • Property insurance claims
  • Expenses covered by the underlying policy
  • Employee discrimination lawsuits

How much does real estate commercial umbrella insurance cost?

Real estate professional calculating the cost of business insurance.

Most real estate businesses pay a median of $75 per month for commercial umbrella insurance, but you could pay more or less depending on your risks.

Insurance costs for real estate professionals are based on a few factors, including:

  • Real estate services offered
  • Business equipment and property
  • Revenue
  • Location
  • Number of employees

Other important insurance policies for real estate businesses and rental property owners

In addition to commercial umbrella insurance and its underlying policies, real estate professionals and rental property owners should also consider:

Cyber insurance: This policy helps real estate businesses survive data breaches and cyberattacks. It can help cover client notification expenses and other associated costs.

Errors and omissions insurance (E&O): Also called professional liability insurance, this policy can cover legal costs of lawsuits related to a real estate professional's business decisions.

Lessor's risk only (LRO) insurance: This policy protects commercial landlords from tenant lawsuits over property damage and injuries.

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Are you ready to safeguard your real estate business with commercial umbrella insurance? Complete Insureon’s easy online application to compare quotes from top U.S. insurers. Once you find a policy that fits your needs, you can begin coverage in less than 24 hours.

Updated: April 7, 2024
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