Umbrella & Excess Liability

Commercial Umbrella and Excess Liability Insurance

What’s the difference between commercial umbrella insurance and excess liability insurance?

Commercial umbrella insurance and excess liability insurance are not the same policy.

Excess liability insurance gives you additional coverage after your underlying liability policy (commercial general liability policy) limits are exhausted. It only covers the claims that would have been covered in the underlying policy, such as coverage terms, conditions, and exclusions. Excess liability insurance won’t provide coverage beyond what’s included in your underlying policy.

Commercial umbrella insurance gives you extra liability coverage to help pay the costs that exceed your general liability or other liability policy limits. It can provide an extra layer of protection over various primary liability policies such as business auto policy, commercial general liability, product liability and employers’ liability coverage. Umbrella insurance may cover different coverage terms, conditions, and exclusions that aren’t in your underlying policy. It also drops down and picks up where your underlying liability policy leaves off when the aggregate limits are exhausted.

Insurance companies write umbrella or excess liability policies with aggregate limits. These limits can range from $1 million to $15 million. The insurance company will only cover claims up to your liability policy limit and it’s critically important to have umbrella or excess liability coverage to pick up the leftover liability amount. You would have to pay out of pocket for expenses that cost more than your coverage limit without commercial umbrella or excess liability coverage. This can put your businesses and assets at serious risk.

It’s also important to know that umbrella insurance doesn't cover every type of liability claim, and it won't extend certain types of liability coverage. TransGlobal P&C Insurance Agency is dedicated to walk you through the various policies available to help determine the type of insurance best fit your unique situation.

What does commercial umbrella and excess liability cover?

For instance, when you’re involved in a lawsuit and found responsible for a customer’s injuries that occurred on your business location, your underlying liability policy (general liability policy) will have to cover the medical expenses, lawsuits, and judgments against your business. If the claim amount is over your general liability coverage limit, the umbrella and excess liability coverage can help to pick up the remaining claim amount.

Who should purchase commercial umbrella insurance?

It’s highly recommended to manufacturers, wholesalers, distributors, food processing manufacturers, etc. For instance, vendors like Home Depot, Walmart, and Sprouts often require their suppliers to carry $5 to $10 million of product liability insurance in a combination of general liability with umbrella or excess insurance coverage in order to enter into a business contract.

For retailers, the more your business interacts with clients and customers, the higher your liability risk will be. Your risks involved in a bodily injury lawsuit can be even greater if your employees use heavy machinery or dangerous equipment. You should consider purchasing umbrella or excess liability coverage if you think the cost of a claim could exceed your liability limits.

Contact us at TransGlobal P&C Insurance Agency to inquire more details and learn more about how umbrella and excess liability insurance can add an extra layer of protection for your business.