A Commercial Umbrella Policy is designed to provide protection for catastrophic liability losses that exceed the limits of the underlying general liability policy, business auto policy or employers liability portion of the workers compensation policy. A Commercial Umbrella Policy may also provide a broader range of coverage than the primary policies. There is no "standard" umbrella policy so it is important to discuss your prospective insurance company's underwriting philosophy and rating guidelines before committing to purchasing a policy.

Be careful not to confuse an "Umbrella Policy" with an "Excess Policy." An Excess policy provides specific coverage above a specified underlying limit, up to a specified limit. An Excess policy does not offer the broad blanket of additional liability coverage that may be found in an Umbrella Policy. Excess Liability coverage is never broader than the Primary Coverage in all areas. It may be broader in some but narrower in others so again, it is important to discuss this coverage with your agent.

While there is no standard list of Commercial Umbrella Policy exclusions, they are generally patterned after the language in the underlying policies. It is important to have a clear understanding of what all your policies will and will not cover so be sure to spend some time talking with your agent when the policies are initially written and at each renewal.

As a business owner, it is always a good idea to have a Commercial Umbrella Policy. In fact, many property managers now require that lessees maintain an Umbrella Policy with limits ranging from one million to ten million dollars in excess of the underlying general liability policy. Some larger, General Contractors have also begun requiring their subcontractors to carry a Commercial Umbrella.