Commercial Umbrella Insurance

What a commercial umbrella actually does

A commercial umbrella (also written as excess liability) sits on top of the liability policies you already carry — general liability, commercial auto, and the employers liability part of workers' comp. Those underlying policies pay first. When a covered claim is big enough to use up an underlying limit, the umbrella keeps paying, in $1 million increments up to whatever limit you buy.

One umbrella can raise the effective limits on several policies at once. That is why it's usually the cheapest way to carry big limits: you're not doubling your general liability premium, you're adding a second layer that only responds to the rare, severe claim.

Who needs one

• Contractors and subs signing bigger contracts — GCs, municipalities, and commercial landlords increasingly require $2M, $5M, or more per occurrence. Your COI has to show it before you're on the job.
• Businesses with vehicles on the road — a serious at-fault accident is the fastest way to exhaust a $1M commercial auto limit.
• Anyone the public walks into — restaurants, retail, venues. A severe injury verdict can pass seven figures.
• Employers — an umbrella can sit over employers liability for suits that fall outside workers' comp benefits.

What it costs

Umbrella pricing depends on what's underneath it — your industry, payroll, vehicles, and the underlying limits you carry. As a rough guide, many small businesses pay in the range of $400–$1,500 per year for the first $1 million of umbrella coverage, with each additional million typically costing less than the one before it. Riskier operations (heavy construction, large fleets) pay more. Your quote will show your real number.

How the layers fit together

Say you carry a $1M-per-occurrence general liability policy and buy a $2M umbrella. A $2.5M covered judgment would be paid $1M by the GL policy and $1.5M by the umbrella. Without the umbrella, that last $1.5M comes out of the business.

Two details matter when we place one for you:

• Required underlying limits. The umbrella carrier requires your base policies to carry certain minimums (commonly $1M GL, $1M auto, $500K–$1M employers liability). We check this so there's no gap between layers.
• Follow-form language. A good umbrella follows the terms of the policies beneath it. We read the forms so an exclusion in the middle layer doesn't surprise you at claim time.