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How Does a Commercial Umbrella Policy Work?



Ever wondered why a business would need an “Umbrella” policy is and how it might apply to your business? A Commercial Umbrella policy boosts the coverage limits of an existing liability coverage to help protect your business in situations where accidents generate losses that exceed your primary policy limits.

Commercial Umbrella coverage isn’t just for big businesses. Small businesses and freelancers who want to cover exclusions in their existing liability policy should consider umbrella insurance. Without a Commercial Umbrella policy, your business may find itself on the hook for the large costs above your policy limits.

For example, if your business has a $1 million limit on its General Liability coverage, adding a Commercial Umbrella policy with a $2 million limit of liability would effectively give you up to $3 million of overall liability coverage, subject to policy conditions, in the event of a covered loss. Umbrella policies can provide up to several million dollars in excess coverage for an additional premium, if your business has exhausted available limits in the appropriate underlying coverages, such as General Liability, Commercial Auto, and Employers’ Liability policies.

For more information on insurance for your business, we encourage you to contact an Independent Insurance Agent. You can find an Independent Insurance Agent by using our ‘Find an Agent’ tool here.