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October 6, 2021

What is a commercial umbrella policy? Why does my business need it?


A commercial umbrella policy safeguards your business against large, unexpected liability losses that exceed your primary coverage and that could force your business to shut down. It provides another layer of coverage in addition to your primary coverage. Once the limit on your primary insurance has been depleted, a commercial umbrella begins paying claims. A commercial umbrella policy can cover primary policies such as commercial vehicle, workers’ compensation, or general liability, including bodily injury, property damage, or personal and advertising injury.

Commercial umbrella insurance protects your business in four ways. First, it provides an increased dollar amount of coverage beyond those in the primary coverage. Second, it provides coverage for a wider variety of losses than the primary policies do. Third, it begins providing coverage when the primary policy’s coverage has run out because of the claims paid out. Fourth, it covers the cost of defending your business against the lawsuits covered by the policy.

Businesses may have additional reasons for purchasing commercial umbrella insurance. Some may purchase a commercial umbrella policy because they simply need more protection against large losses than their primary policies provide. Other companies obtain a commercial umbrella policy to fulfill contractual requirements for general liability or commercial vehicle insurance. And some businesses need an umbrella policy because they are more vulnerable to catastrophic losses—for example, construction contractors, crane operators, and tree trimmers. 

Let the experts with Koch Insurance Group help you identify your insurance needs and find the policy that’s the best fit and value for your business.

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