Commercial umbrella insurance: for the costly claims you can’t always expect (or even prevent)

Unfortunately, we can’t answer that for you. We live in a litigious society, where the threats of a lawsuit are very real. And regardless of whether the lawsuit is valid, defending your business won't be cheap. So if you ask us, there are very few businesses that don't need a commercial umbrella policy.

To decide if this coverage is right for you, we recommend assessing how much risk you have and what types of business exposures you face.

>Here are a few things to consider when deciding if this coverage is right for you and your business:

• Do you have a substantial amount of assets that you want to protect in the event of a lawsuit?
• Does your business have any contractual obligations or services?
• Do you have employees?
• Do you have a business that is open to the public or your customers?
• Do you have any high-profile or high net-worth clients?
• Does any of your business require a lot of driving or deliveries?
• Does your marketing and branding, website or brochures make any promises or guarantees?

If you answered yes to any of the questions above, you may have more of a risk than other businesses, which could put you at a higher chance for a lawsuit.

That’s a great question, and at the end of the day, only you can answer that based on how much risk you’re willing to tolerate. 

A commercial umbrella policy starts with a minimum of $1,000,000 in coverage. Additional coverage is available in $1,000,000 increments.

Here’s the good news - probably not as much as you think.

Umbrella insurance may even cost less than the underlying coverages you pay for. This is because your umbrella insurance coverage won’t kick in until your underlying coverage has been exhausted.

As with every policy, the cost will depend on a variety of factors, including how much coverage you wish to buy, your business type, industry, location, gross revenues, gross payrolls, subcontractor labor costs, how many employees you have, and more.

For more information, read How Much Does Business Insurance Cost?

First things first - talk to your independent insurance agent that handles your commercial liability, commercial auto and workers compensation coverages. They will be able to get you the best price and protection for your business. 

If you want to shop around, be sure to have copies of your underlying policies, information about any claims in your business for the last 3-5 years, copies of any contracts in place, and the basic business information we outlined in the question above. 

Gather all your information in one spot. Download this free Business Insurance Worksheet.

For more information, read How Much Does Car Insurance Cost?