Umbrella Liability Insurance
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What is umbrella liability insurance?

Umbrella / excess liability insurance icon
Umbrella / excess liability insurance

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

When do small businesses need umbrella liability insurance?

Umbrella liability insurance, also called excess liability insurance, boosts the coverage limits of an existing liability policy. Small businesses that purchase this policy usually need it to fulfill a contract that requests higher than standard policy limits. For example, if a client contract required a general liability policy with a $5 million limit, an umbrella policy of $4 million would be added to your existing $1 million general liability policy.

If a lawsuit ends up costing more than your liability insurance policy limit, commercial umbrella coverage frees up additional funds so you don’t end up paying out of pocket. An umbrella policy is often a cheaper option than increasing the limits on your liability insurance.

Umbrella insurance can supplement the liability coverage of:

Before you can purchase umbrella liability insurance for any of these policies, an insurer will require you to carry at least $1 million in coverage on the underlying policy.

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Businesses that need this policy:

  • Need more protection and are on a budget
  • Are required to carry a high liability policy limit to work with a certain client
  • Have high liability risks, such as a business location with a lot of foot traffic
  • Want to cover exclusions in their existing liability policies

How does umbrella liability insurance help businesses?

Small business
General liability insurance
You have a busy storefront and want to protect against the high cost of a customer injury lawsuit.
Commercial auto insurance
Your business operates a fleet of vehicles and the costs of several minor accidents could exceed your policy limit.
General liability insurance
Before you can work with expensive equipment, the client asks you to increase your policy limit in case you damage it.
Commercial auto insurance
You get into an accident on your way to visit a client and the property damage exceeds your regular policy limit.
Home business
General liability insurance
A corporation sues over copyright infringement and the damages end up costing more than your policy limit.
Commercial auto insurance
Your business vehicle gets into an accident; someone is injured and the medical bills exceed your policy limit.

How does umbrella insurance protect businesses when added to employer's liability insurance?

Businesses that involve hazardous work, such as construction, may need extra protection against employee injury lawsuits. Umbrella insurance added to employer's liability insurance guards against employee claims that your negligence led to an injury.

Umbrella liability insurance costs

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Umbrella insurance can cost less than increasing the limits of the underlying policy. Several factors affect policy costs, including:

  • Industry and risk
  • Coverage limits
  • Location
  • Number of employees
  • Number of vehicles
View Costs

Learn more about umbrella liability insurance

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