What Does Commercial Umbrella Insurance Cover?

If you are concerned that a lawsuit might bankrupt your business, then you probably use liability insurance as a safety net. However, if you worry that your policy would not pay enough to cover a serious claim, then an additional commercial umbrella insurance policy might be right for you. Here is an explanation of what one covers and doesn’t cover.

What a Commercial Umbrella Policy Covers

A commercial umbrella policy goes into effect when you reach the financial limits of your existing liability coverage. It pays for reparations and the legal fees of any lawsuits due to the following types of claims:

  • Libel
  • Copyright infringement
  • Vehicular accidents
  • Product liability
  • Bodily injury
  • Property damage

What a Commercial Umbrella Policy Does Not Cover

Most commercial umbrella policies do not cover claims over $15 million, so you should check with your insurance company to find out what your aggregate limit is. They also will not cover damages to your own property. Umbrella insurance cannot replace an existing liability policy, so be sure yours is up-to-date.

If the dollar value of risks your business faces exceeds the amount of your insurance coverage, then consider an umbrella policy. This additional liability coverage may be the best investment in your business that you ever make.