Commercial umbrella insurance is a secondary form of insurance that bolsters the coverages of the underlying, primary policies. A primary policy may be a general liability policy, a commercial property policy, a commercial auto policy or another business insurance policy. Generally speaking, an umbrella insurance can be used to fill in coverage gaps that underlying policies have and extend the limits that they have. In many cases, a commercial umbrella policy will serve as a supplemental policy for several underlying policies.
As a secondary, or supplemental, policy, a commercial umbrella policy usually doesn’t provide coverage until the coverages of the underlying policy have been exhausted. Additionally, most commercial umbrella policies require businesses to maintain primary policies that provide a minimum amount of coverage. The specific requirements vary.
Many businesses in Massachusetts stand to benefit from having a commercial umbrella policy. Some particular businesses that may want to consider a commercial umbrella policy include:
Commercial umbrella and excess liability insurance are sometimes used interchangeably, especially by individuals who aren’t in the insurance industry. The two types of insurance are distinct, though. While both commercial umbrella and excess liability provide supplemental coverage, they differ in how many policies they enhance and the coverages they provide.
Commercial umbrella policies usually are used in conjunction with multiple underlying policies. Excess liability insurance policies, in contrast, typically only enhance one primary policy.
Most excess liability policies are “follow form” policies, meaning their coverages and exclusions are identical to those of the underlying policy. Commercial umbrella policies can have different coverages and exclusions, which is why they can be used to fill in coverage gaps.
Because commercial umbrella insurance policies typically have requirements detailing what types of underlying policies must be maintained, businesses should talk with an independent insurance agent when they’re looking for a commercial umbrella policy. A knowledgeable, independent agent will be able to help your business compare all commercial umbrella policies offered in Massachusetts by insurers, and they can make sure your company has the proper underlying policies in place.
Even with robust insurance policies in place, businesses sometimes remain exposed to potential risks. Commercial umbrella insurance provides businesses with a way to enhance their insurance protections. For many Massachusetts businesses, the additional protection is well worth having. We're happy to consult, chat or answer any questions that you have - just drop us a line!