5 Critical Facts About Commercial Umbrella Insurance

Almost every business large or small needs some level of added protection afforded by a commercial umbrella insurance policy. A commercial umbrella policy provides a layer of coverage over and above a primary business and auto policy. There are at least five important facts to be aware of when considering commercial umbrella insurance.

1. An umbrella policy can, but may not always, provide the same coverage as the primary policy. If you have a “following form excess policy” you can be guaranteed that the excess policy will provide the same coverage as the primary policy.
2. Most umbrella policies require at least $1 million dollars of primary or underlying limit.
3. Umbrella pricing is usually a predetermined rate based on the underlying premium, but can include the judgment of the underwriter.
4. If the primary policy has additional insured’s, they will carry over into the umbrella policy.
5. Umbrella policies may have exclusions not found in the primary policy; for example, pollution, workers’ compensation, and product recall. If you have a true following form excess policy, your exclusions will be the same as in the primary policy.

Our Commercial Excess Liability, or Umbrella, insurance policy gives your business an added layer of liability protection over and above your commercial policies. For example, if you have $1 million in general liability coverage and a covered claim is settled for $1.5 million, your business’s umbrella liability insurance policy would pick up the additional $500,000 amount.

At Leap / Carpenter / Kemps, Merced County’s largest locally-owned agency, we have an experienced staff of professionals who understand that each business is unique and that the one-size-fits-all approach just doesn’t work.