Commercial Umbrella Insurance provides supplemental coverage when the cost of a lawsuit exceeds the liability limits your liability insurance policy. You might require this type of commercial insurance if you’re at risk of major law suits. Essentially, it provides coverage for liabilities above what your other insurance covers. For example: You lose a law suit for $2 million, and your Business Liability Insurance will only cover $1 million. The umbrella policy would cover the remaining $1 million, and it is usually applied to other liability insurance policies as well.

Umbrella coverage does extend the coverage limits of a liability insurance policy. An additional benefit is that the coverage can be broadened (applied) to additional coverage types as well as toward primary coverage limits, which is called Step Down coverage. If your business experiences several claims that exhaust your primary coverage limits, the Step Down provision of the Umbrella policy can pay these coverage amounts. The Umbrella policy is subject to a Self Insured Retention (SIR) which is like a deductible that must be paid prior to activating the Umbrella coverage. The differences between Umbrella Coverage and Excess Liability Coverage are important to understand. Let your Pacific Reliance Insurance broker discuss your business structure and operations. From there we can provide a comprehensive explanation of which might be a better choice to properly protect your business.