Commercial Umbrella Insurance
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Frequently asked questions about commercial umbrella insurance

Umbrella liability insurance offers an extra layer of coverage, in case a claim exceeds certain liability insurance policies. Find out how to get a policy, when you need it, and the answers to other frequently asked questions below.

Commercial umbrella insurance requirements and coverage

What does umbrella insurance cover?

Umbrella liability insurance covers claims that exceed the coverage limits on your general liability insurance, employer’s liability insurance, commercial auto insurance, and hired and non-owned auto insurance (HNOA).

It kicks in after a claim exceeds your coverage limit on one of these underlying policies and provides coverage up to the policy limit of your umbrella policy.

What is not covered by an umbrella policy?

An umbrella liability policy doesn’t cover excess claims against professional liability insurance (also known as errors and omissions insurance, or E&O), medical malpractice insurance, commercial property insurance, or commercial crime insurance.

How do commercial umbrella limits work?

Commercial umbrella insurance provides added liability coverage in case you have a claim that exceeds the coverage limits of an underlying policy.

For example, imagine if you had a $1 million per-occurrence limit on your general liability policy, and a customer sues you over an accident that occurred at your business location. The medical bills, legal expenses, and damages from this accident could add up to $1.5 million, which would then exceed the limit on your general liability coverage.

If you had an umbrella policy, it would cover that excess $500,000 liability, up to the coverage limit of your umbrella insurance.

How much umbrella insurance do I need?

That depends on the size of your business, your liabilities, and any contractual obligations you have with clients. For example, if a contract requires you to have $5 million in general liability coverage, you could buy $2 million of general liability insurance with a $3 million umbrella policy to meet that obligation.

Umbrella insurance is available in $1 million increments. Keep in mind that you must have an underlying policy, such as general liability or commercial auto insurance, before you buy umbrella coverage.

If you're unsure how much coverage you need, you can chat with a licensed insurance agent.

Why do I need a commercial umbrella policy?

There are many reasons why you may need commercial umbrella coverage:

  • It’s an affordable way of increasing your liability coverage to qualify for contracts
  • Your business relies on a lot of foot traffic, which increases the risk of a lawsuit over slip-and-fall accidents and other mishaps
  • Your work involves hazardous conditions, such as in construction or manufacturing, that could result in an employee injury
  • You rely on business vehicles that spend a lot of time on the road, increasing your chance of an accident and a lawsuit

How to buy umbrella insurance coverage with Insureon

How quickly can I get commercial umbrella coverage with Insureon?

By providing basic information about your business, such as its location, the number of employees, and estimated revenue for the upcoming year, we’ll be able to give you multiple quotes from top U.S. carriers.

Our online application takes just a few minutes to complete, so that you can compare coverage and find the right policy for your business just moments after submitting your information. A licensed Insureon agent can also help you through this process.

Once you purchase coverage, it typically takes 24 to 48 hours to complete the process and receive your proof of insurance.

How much does an umbrella policy cost?

Commercial umbrella insurance typically costs around $40 per month for every $1 million of liability coverage.

For Insureon customers, the median premium is $75 per month for umbrella insurance, or $900 per year.

Some small businesses (17%) pay less than $500 per year for umbrella coverage and over a third (36%) pay between $500 and $1,000 per year.

Which industries most often purchase umbrella liability insurance?

A variety of small business owners rely on umbrella insurance as an affordable way to increase their liability coverage and protect their bottom line.

This includes:

Umbrella insurance claim and settlement process

When am I able to make an umbrella liability claim? 

Your umbrella insurance is there whenever you face a claim that exceeds the coverage limits of an underlying policy, such as general liability, commercial vehicle, etc.

This could happen whether the underlying policy’s per-occurrence or aggregate limits are exceeded. Your per-occurrence limit is for individual claims. Your aggregate limit applies to all claims within a policy year.

How do I make an umbrella insurance claim?

Call your insurance provider. An agent will ask you some basic information about the incident such as where it happened and your policy number. The agent can walk you through the claims process and answer any additional questions.

Umbrella insurance policy changes

What happens if I need to buy more insurance later?

Just call your insurance provider and tell them you need more coverage. The agent can then adjust your coverage amount and tell you what your new premium will be.

What happens if I cancel my policy?

If you cancel your policy before its expiration date, you’ll likely have to pay more in premiums to buy coverage later on. You also put yourself at risk of an expensive lawsuit or claim that you’d have to pay out-of-pocket.

Compare umbrella liability insurance with other policies

What is the difference between commercial umbrella insurance vs. excess liability insurance?

Excess liability insurance provides additional coverage for a single liability policy, such as your general liability coverage or your errors and omissions insurance. Your excess liability coverage kicks in when you exceed the policy limits on that underlying policy.

Commercial umbrella insurance provides additional coverage for many of your liability insurance policies. It also kicks in when you exceed the policy limits on one of these policies.

Learn more about umbrella insurance vs. excess liability insurance.

What is the difference between umbrella liability insurance vs. general liability insurance?

General liability insurance coverage gives you financial protection from specific business risks such as customer injury, damage to a customer’s property, and advertising injury. It does not apply to any other policy.

Umbrella liability insurance can apply to many of your liability insurance policies such as general liability, employer’s liability insurance, commercial auto insurance, and hired and non-owned auto insurance. Your umbrella coverage is there in case you have a claim that exceeds the coverage limits of one of these underlying policies.

Updated: January 12, 2023
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