UMBRELLA & EXCESS LIABILITY INSURANCE
- Adds higher liability limits to protect against major, disastrous claims
Your commercial general liability policy probably has limits of $1 million to $2 million. However, if you are a contractor you might be told you need higher liability limits to get the job. Or it may make sense to you to have higher liability limits due to the nature of your business or the amount of assets you need to protect.
$1 million is not what it used to be, and you might have a claim where the settlement is more than your policy limit. Example: You have a $1 million general liability policy. A fire starts at your job site and burns down the shopping center next to it, resulting in a $4 million claim. Your general liability insurance company pays their $1 million limit. The shopping center looks to you and your assets to pay the remaining $3 million. Without an umbrella or excess liability policy, business owners are responsible for legal expenses, medical bills, and damages that exceed the limits of their primary liability policy.
Umbrella and Excess Liability – Are they different?
Umbrella and excess liability policies both sit on top of an underlying liability policy. If a claim uses up the limits of the basic liability policy, both the umbrella and the excess policy pick up where the underlying liability policy leaves off.
An excess liability policy adds higher limits to a single underlying liability policy. If you have a general liability policy and a commercial auto policy and you want higher limits on each, you would need two excess liability policies.
An umbrella policy can sit atop one or more underlying liability policies. In the example above, one umbrella policy would add higher limits to the both the general liability and the commercial auto policy.
An umbrella policy may sometimes protect against certain claims not covered by the underlying liability policy. This broader form of coverage is not part of an excess liability policy.
We’ll be happy to discuss your options for higher liability policy limits and we’ll help you get the right policy for your situation.