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Additional liability protection when a serious claim exceeds your underlying limits.
D&E Insurance Group helps Arizona businesses explore commercial umbrella coverage that can provide additional limits over certain underlying liability policies.
A serious liability claim can sometimes exceed the limits provided by your primary business insurance policies.
Commercial umbrella insurance can provide additional liability limits above certain underlying insurance policies when a covered claim exceeds the available underlying limit.
Depending on the policy, an umbrella may sit over coverages such as commercial general liability, commercial auto liability and employers liability.
D&E Insurance Group helps Arizona businesses evaluate their liability exposures, underlying insurance limits and available commercial umbrella options.
Commercial umbrella insurance is designed to provide additional limits when certain covered claims exceed the limits of an underlying liability policy.
1. Underlying Coverage Responds
A covered liability claim is first handled by the applicable underlying policy, such as general liability or commercial auto liability.
2. The Underlying Limit Is Reached
If a covered claim exceeds the available limit of the underlying policy, your business could otherwise be responsible for amounts above that limit.
3. Umbrella Coverage May Apply
Subject to the umbrella policy’s terms and limits, additional coverage may apply above the exhausted underlying limit for a covered claim.
Commercial umbrella policies can have their own exclusions, conditions and underlying insurance requirements. An umbrella does not automatically provide additional coverage for every type of business insurance claim.
A commercial umbrella may provide additional limits over certain underlying liability policies, depending on the umbrella policy and your business insurance program.
General Liability
Additional limits may apply above covered general liability claims involving exposures such as third-party bodily injury or property damage.
Commercial Auto Liability
An umbrella may provide additional limits above covered commercial auto liability claims when the underlying auto liability limit is exhausted.
Employers Liability
Depending on the policy, umbrella coverage may provide additional limits over employers liability coverage associated with a workers’ compensation policy.
The underlying policies and minimum limits required by an umbrella insurer can vary. It is important to coordinate the umbrella with the policies listed as underlying insurance.
Any business can experience a serious liability claim, but certain operations may have greater exposure to losses that exceed primary insurance limits.
Contractors & Higher-Risk Operations
Contractors and businesses performing work at customer locations may have significant liability exposures involving jobsite accidents, property damage and other operations.
Businesses With Vehicles
Businesses operating work trucks, vans or other company vehicles may want higher liability limits because a serious auto accident can result in a substantial claim.
Businesses With Contract Requirements
Customers, landlords, general contractors or other business partners may require liability limits that are higher than the limits provided by a primary policy alone.
Businesses with significant assets, frequent interaction with the public, multiple locations or other substantial liability exposures may also benefit from reviewing whether their current liability limits are adequate.
Commercial umbrella and excess liability policies can both provide additional liability limits, but the way they provide coverage may differ.
Commercial Umbrella
A commercial umbrella policy can provide additional limits over certain underlying liability policies listed in the insurance program.
Depending on the policy, an umbrella may also provide coverage that is broader in certain respects than the underlying insurance, subject to its own terms, exclusions and retention requirements.
Excess Liability
Excess liability insurance also provides additional limits above underlying liability coverage.
Some excess policies more closely follow the terms of the underlying coverage rather than providing broader protection, although policy forms and provisions can vary.
The terms “umbrella” and “excess liability” are sometimes used interchangeably, but the actual policy language determines how coverage works. D&E Insurance Group can help you compare the available forms, limits and underlying insurance requirements.
Commercial umbrella insurance can provide valuable additional liability limits, but it does not replace every type of business insurance coverage.
Professional Liability
Claims involving professional mistakes, negligence or errors in services generally require professional liability or Errors & Omissions coverage rather than a standard commercial umbrella.
Cyber Liability
Data breaches, ransomware and other cyber-related losses typically require specialized cyber insurance and should not be assumed to be covered by a commercial umbrella.
Business Property
A commercial umbrella provides liability protection, not coverage for damage to your own building, equipment, inventory or other business property.
Commercial umbrella policies also contain their own exclusions and conditions. Coverage should be coordinated with the rest of your business insurance program rather than viewed as a replacement for other policies.
Common questions Arizona business owners ask about commercial umbrella and excess liability insurance.
What is commercial umbrella insurance?
Commercial umbrella insurance can provide additional liability limits above certain underlying policies when a covered claim exceeds the available underlying limit.
How much commercial umbrella insurance does my business need?
The appropriate limit depends on factors such as your business operations, vehicle exposure, number of employees, contractual requirements, underlying liability limits and potential severity of a claim. Umbrella limits are commonly available in increments such as $1 million, with higher limits available depending on the insurer and risk.
Does a commercial umbrella cover general liability?
A commercial umbrella may provide additional limits over an underlying general liability policy when the general liability coverage is scheduled as underlying insurance and the claim is covered under the applicable policies.
Can an umbrella provide additional commercial auto liability limits?
Depending on the policy, commercial umbrella coverage may provide additional limits above scheduled commercial auto liability insurance after the applicable underlying limit is exhausted.
Is commercial umbrella insurance required in Arizona?
Commercial umbrella insurance is not universally required for Arizona businesses. However, contracts, leases, customers or other business relationships may require liability limits that make an umbrella or excess liability policy necessary.
What is the difference between umbrella and excess liability insurance?
Both can provide additional liability limits. Some excess policies closely follow the terms of the underlying insurance, while certain umbrella policies may provide broader coverage in specific circumstances. The actual policy language determines how coverage applies.
Does commercial umbrella insurance cover professional liability or cyber claims?
A standard commercial umbrella should not be assumed to extend over professional liability or cyber insurance. Businesses with those exposures may need separate specialized coverage.