Professional Insurance Programs

Commercial Umbrella Insurance: Strengthening Your Business Protection

Running a business comes with inherent risks, and having the right insurance in place is crucial to safeguarding your company’s future. One way to add an extra layer of protection is by purchasing a commercial umbrella insurance policy. Whether it’s to meet contractual requirements or to provide additional peace of mind, this coverage can help protect your business from catastrophic financial losses.

What Is a Commercial Umbrella Policy?

A commercial umbrella policy acts as an extension of your existing insurance coverage. Think of it as a large umbrella shielding you from heavy rain—where the rain symbolizes potential risks. While your primary insurance policies, like general liability or commercial auto, provide coverage up to a certain limit, a commercial umbrella policy steps in to cover claims that exceed those limits. In some cases, it may also address claims not covered by your underlying policies.

This additional coverage ensures your business is better equipped to handle significant liability claims, which can arise unexpectedly. Since each policy is unique to the insurer offering it, it’s essential to review the terms carefully to understand what’s included.

Types of Underlying Policies Supported by Commercial Umbrella Insurance

A commercial umbrella policy typically complements three main types of underlying insurance:

1. Commercial General Liability (CGL)

General liability insurance is a cornerstone for most businesses, covering claims related to:

  • Bodily injury to a third party
  • Property damage to others
  • Personal injury (e.g., defamation)
  • Advertising injury

While these policies provide robust coverage, high-dollar claims could exceed their limits. A commercial umbrella policy boosts your financial resources to pay for damages and defense costs, ensuring your business isn’t left vulnerable.

2. Employer’s Liability

Included with many workers’ compensation policies, employer’s liability insurance addresses claims not covered by general liability, such as those involving damages claimed by an employee’s family. For example, if an employee’s injury leads to additional expenses for dependent care or a spouse’s loss of companionship, a lawsuit could arise. A commercial umbrella policy provides extra funds to help your business manage these unexpected claims.

3. Commercial Auto Insurance

If your business owns vehicles or relies on employees using their personal vehicles for work purposes, commercial auto insurance is a must. This coverage addresses liability from accidents involving these vehicles. Should the costs of a claim surpass your auto policy’s limits, a commercial umbrella policy can step in to protect your business from financial strain.

Protect Your Business with Confidence

Understanding how your underlying policies work and how a commercial umbrella policy complements them is vital for comprehensive business protection. By expanding your coverage, you ensure your business has the financial support needed to weather any liability storm.

If you’d like to learn more about commercial umbrella insurance or evaluate your current policies, reach out to Professional Insurance Programs. Our team is here to help you find the right coverage to keep your business secure. We can be reached at 800-637-4676 or info@profinsprog.com.