The Ultimate Business Umbrella Insurance Guide

Table of Contents

Whether you need answers to these questions about Business Umbrella Insurance or just want a commercial umbrella insurance quote, you’ve come to the right place!

What Is Commercial Umbrella Insurance?

Standard workers’ compensation coverage benefits include medical treatment, disability benefits, ongoing care, missed wages, and funeral costs for injury or illness sustained on the job. These insurances are meant to be no-fault coverages that you, as an employer, provide for your employees. For an IN-DEPTH look into what NC Workers Comp Insurance Is, check out our full article below.

What Is Commercial Umbrella Insurance?

Commercial Umbrella Insurance is an insurance policy that gives an extra layer, or level, of liability protection that sits over and above a business’s primary insurance policies.

Umbrella Policies provide extra liability for the following types of policies (this varies from carrier to carrier)

  • General Liability / Business Owners Liability
  • Business Auto Liability
  • Workers Compensation  / Employer Benefits Liability

Business Umbrella Policy Limit Options

  • $1,000,000
  • $2,000,000
  • $3,000,000
  • $4,000,000
  • $5,000,000
  • $6,000,000
  • $7,000,000
  • $8,000,000
  • $9,000,000
  • $10,000,000

What Does Business Umbrella Insurance Cover?

Business Umbrella Insurance provides an ADDITIONAL Liability Limit to your current insurance policies.

What Is A Follow Form?

Most Commercial Umbrella Policies are referred to as “Follow Form”.

This means that the umbrella policy will cover any claim that the underlying insurance policy the umbrella sits above would cover.

Example – If the underlying General Liability Policy names another business as an Additional Insured…the Commercial Umbrella Policy would afford the same rights to that Additional Insured.

How Much Does Business Umbrella Insurance Cost?

Commercial Umbrella Policies vary in price.  Most Insurance Carriers have “Minimum Premiums” for different business types.

How Much Is The Minimum Premium For Commercial Umbrella Insurance?

The Minimum Premium For Most Commercial Umbrella Policies IS $500

How Are Business Umbrella Rates Determined?

Business Umbrella Rates Are Determined using the following factors:

  • Business & Industry Class (what does your business do)
  • Annual Revenue
  • Annual Payroll
  • Number Of Employees
  • Loss History (Liability Loss History)
  • Underlying Policy Premium(s)

Obviously, the higher the underlying exposure(s), the higher the premium

Why Do I Need A Commercial Umbrella Policy?

Lawsuits are filed EVERY DAY against small businesses.

Insurance Claims that are filed, and deemed to be legitimate, have two primary costs.

  1. The Actual Damages Of The Claim
  2. The Legal Fees

Lawsuits can, and do, takes years to finish.  Legal Fees can mount at an alarming rate.  Once your primary insurance limits are exhausted, YOU are responsible for any costs that exceed those limits.

Our Society is SUE Crazy!

In such a society, the rule of thumb in any lawsuit is to find the “deepest” pockets to go after.  It doesn’t matter if you have a multi-million dollar public company, or a “mom & pop” home business,  a lawsuit could put your business, out of business!

The fact is, today’s small and medium-sized businesses face the same problems as a Fortune 500 company faces.

The difference is, the Fortune 500 company has enough money to hire the very best legal team(s) to defend a large lawsuit or to simply reach a financial settlement with the person(s) bringing suit against them.  Even with these financial resources available, Fortune 500 companies (and most large companies) share something in common…they own Business Umbrella Insurance.

If companies with the financial resources to hire the best legal teams, make settlements to avoid long lawsuits choose to have Business Umbrella Liability Insurance… shouldn’t you?