Commercial Umbrella Insurance provides an additional layer of liability insurance, (Bodily Injury and Property Damage), over and above existing business liability policies, also known as underlying policies. Typical types of underlying policies would include Commercial General Liability, Contractors Liability, Business Owner, Business Auto, and Workers Compensation/Employers Liability. Coverage limits are usually offered in increments of $1,000,000 and any covered claims will typically be subject to a $10,000 Self-Insured Retention, (SIR), or deductible.
Commercial Umbrella Insurance Requirements
The Commercial Umbrella policy will require specific types of underlying policies providing specific minimum limits of coverage in order for the Umbrella policy to apply. Generally, the Umbrella policy will only be involved when a claim on an underlying policy exceeds the policy limits, at which time the additional Umbrella policy limit will apply to that claim. If, at the time of loss, the involved underlying policy does not meet the Umbrella policy required minimum liability limits, the difference between the required minimum limits and the actual coverage provided by the underlying policy becomes a “deductible” for the Umbrella policy. As such, it is extremely important to maintain proper liability limits on the underlying policies.