Running a business comes with many responsibilities — including making sure you have the right insurance coverage to protect what you’ve built. While standard policies like general liability, commercial auto, and workers’ compensation cover a lot, they all have limits. That’s where Business Umbrella Insurance comes in.
Business umbrella insurance provides extra protection by extending the coverage limits of your underlying liability policies. It’s designed to kick in when a claim or lawsuit exceeds what your primary policies will pay.
What Does Business Umbrella Insurance Cover?
A business umbrella policy typically covers:
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Third-party bodily injury claims: If someone is hurt on your property or because of your operations, and medical bills or legal judgments exceed your general liability limits, umbrella insurance helps cover the excess.
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Third-party property damage: If your business activities damage someone else’s property and the costs go beyond your policy’s limits, umbrella insurance steps in.
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Certain lawsuits: Including slander, libel, and reputational harm, depending on the policy wording.
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Auto liability claims: If your company vehicles cause an accident with major injuries or damages that exceed your commercial auto policy.
Essentially, umbrella insurance adds an extra layer of financial protection when your business faces a big claim.
When Does a Business Need Umbrella Insurance?
Not every business has to carry umbrella insurance, but it’s smart to consider it if:
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You interact with the public frequently (like customers visiting your office, store, or job site).
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You operate heavy machinery or dangerous equipment.
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You use vehicles for business purposes.
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You have employees working offsite or at client locations.
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You host events or large gatherings.
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You work with high-profile clients where reputational risks could lead to large lawsuits.
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Your contracts require higher limits than your primary policies offer.
Lawsuits and major claims can happen unexpectedly — and settlement amounts can be much higher than you might think. Without umbrella coverage, your business could be responsible for paying the difference out-of-pocket, putting your financial future at risk.
How Much Umbrella Coverage Should You Get?
The right amount depends on your business size, industry, and how much risk you’re exposed to. Many businesses start with an extra $1 million to $2 million in coverage, but companies with higher risks or more assets may need more.
A business insurance advisor can help you assess your risks and recommend the right umbrella policy to fit your needs.
Have Questions About Business Umbrella Insurance?
We’re happy to help you review your current coverage and determine if an umbrella policy makes sense for your business. Contact us today to learn more!
