What is commercial umbrella insurance?

No, smartypants, it's not insurance for umbrellas.

So, businesses carry liability insurance to protect them from big lawsuits and stuff. Like, if someone trips and falls on the premises and gets hurt or something…and then sues. And that insurance is great. But did you know that there’s insurance that can actually go above and beyond the limits of coverage on the underlying insurance policy? Yep – that’s a thing! It’s called commercial umbrella insurance. And it’s pretty cool.

(No, it is not insurance for umbrellas. It actually doesn’t have anything to do with umbrellas, oddly enough.)

Anyways, commercial umbrella insurance can come to the rescue if the business’s underlying policy taps out. So, if you exhaust the first insurance policy (for example, your general liability insruance) umbrella can jump in and say, “I got this.” It sits on the other insurance like an umbrella. (Yes, the name is weird.)

Make sense? Well, it’s insurance, which usually doesn’t make sense, so we’ll give you an example.

Let’s say that a business has a $1 million general liability insurance policy. That sounds like a lot. But then they have a real whopper of a claim. Like, we’re talking $1.6 million – yikes. So, if you’re doing your math right, you probably see that $1.6 million is more than $1 million. And that should make you say “uh-oh”.

But let’s say that the business has a $1 million umbrella policy. Their general liability insurance could help them out with the first $1 million of the claim, and then the umbrella may jump in to cover the leftover $600,000. Basically the general liability taps out, and umbrella takes over.

Commercial umbrella insurance is a helpful coverage to consider for your business. It’s kind of an extra safety net for those super big claims. It can be a real superhero.

Anyways, if you want to talk about getting insurance for your business, we’d be happy to help. Give us a call, message us, or fill out our quick form.

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