What’s the difference between Umbrella Insurance and Excess Insurance?

Umbrella insurance and excess insurance both pay claims after an underlying primary policy is exhausted. The difference is that excess insurance policies conform exactly to the coverage of a specific underlying policy and simply add their on their own excess limit on top of the primary policy’s limit while umbrella insurance policies provide broader coverage over one or more primary policies. Umbrella insurance may have broader definitions of what is covered than in the primary policies and may even lack exclusions used in the primary policies. The name “umbrella” refers to the broad coverage umbrella insurance provides.

Why does my business need Commercial Umbrella Insurance?

Every company faces the possibility of an unexpected lawsuit. When serious situations arise such as accidents that result in serious injuries, deaths, heavy property damage and law suits, commercial umbrella insurance can help protect your business.

Your standard business liability policies, such as your General LiabilIty or Commercial Auto insurance policies, will cover you in most situations. However, when serious accidents happen, people sue, and the limits of standard business liability policies are often not enough to cover all the claims against you and your business. Commercial umbrella insurance will help ensure that your business is protected by providing coverage above the limits of your standard liability policies. Since umbrella insurance can add additional protection to several liability policies at once, it is often less expensive than raising the limits on each policy separately.

Here are some examples of serious incidents where commercial umbrella insurance can help:

• You’re found liable for a customer’s injury that occured at your place of business.
• One of your employees causes an accident resulting in injuries or death to others while driving a company vehicle.
• A guest at a company party has too much to drink and causes a serious auto accident.
• One of your products causes illness or injury to a customer.
• A fire originating at your business destroys neighboring businesses.
• Your building has a carbon monoxide leak resulting in injuries and/or deaths.
• Your business fails to render the appropriate professional services.

How does Commercial Umbrella Insurance Work?

A commercial umbrella policy picks up coverage where your primary liability coverages such as general liability and commercial auto liability stops. It expands the limit that your business already has with its existing or underlying liability policies.

For example, if your current business liabilty policy covers you for $1 million and you are successfully sued for $1.5 million, your commercial umbrella insurance coverage can pay the outstanding $500,000.

Commercial umbrella insurance also broadens coverage for incidents that your standard business liability policies may not cover. For example, if your commercial auto liability insurance covers accidents only when driving in a specific area, an umbrella policy could expand the coverage area.

Since no two businesses are alike, your commercial umbrella policy can be customized to fit the needs of your particular business. An auto repair shop may need additional coverage beyond the limits of their garage liability insurance while a bar or restaurant may need additional coverage beyond the limits of their liquor liability insurance.

Ask a Bowles Business and Commercial Insurance Specialist for more information about Commercial Umbrella protection for your Gretna or New Orleans area business. We can tailor comprehensive business insurance plans for nearly every type of business in the New Orleans area or the State of Louisiana. Consultation and evaluation of your present business insurance policies are always free.