Commercial umbrella insurance is liability insurance that fills in any gaps in your general liability insurance, employer’s liability insurance and/or commercial auto liability insurance. It will help pay expenses that exceed the limits on these policies.
- The 5 Best Providers of Commercial Umbrella Insurance
- What is Commercial Umbrella Insurance?
- How Much does Commercial Umbrella Insurance Cost?
- Do Small Businesses Need Commercial Umbrella Insurance?
- What does a Commercial Umbrella Insurance Policy Cover?
- Is Commercial Umbrella Insurance Necessary?
- What Affects the Cost of Commercial Umbrella Insurance for Small Businesses?
- How Much Commercial Umbrella Insurance do I Need?
- How Much is a $3 Million Commercial Umbrella Policy?
- Why is Commercial Umbrella Insurance Important?
- Does Commercial Umbrella Insurance Cover Lawsuits?
The 5 Best Providers of Commercial Umbrella Insurance
We research more than 20 companies offering commercial umbrella insurance and here are our recommendations of the 5 best providers:
- CoverWallet: Best for Online Quotes of Commercial Umbrella Insurance
- Nationwide: Best Overall Commercial Umbrella Insurance
- Farmers: Best for Personalized Service in Commercial Umbrella Insurance
- Travelers: Best Commercial Umbrella Insurance for Small Businesses
- Chubb: Best Commercial Umbrella for Mid-to-Large Sized Businesses
CoverWallet: Best for Online Quotes of Commercial Umbrella Insurance
CoverWallet can offer you a quote on a business owner’s policy (BOP) or general liability insurance. After you get a quote on those policies, you can get commercial umbrella insurance added on.
CoverWallet has a great online quotes, so you can shop around for the best general liability policy. They work with several leading business insurance companies and can pull quotes from these companies for you. Within less than 10 minutes, you will have several quotes to compare and select the best one for you.
If your goal is to get the cheapest quote, you may want to start with CoverWallet.
CoverWallet is a subsidiary of Aon, one of the largest business insurance brokers in the world, so they do have good financial backing. They also earn a A rating for consumer rating from BBB.
Once you buy a policy from CoverWallet, you are able to access to their digital dashboard where you can manage all of your business insurance policies in one central location. The dashboard also offers several useful features such as downloading the insurance certificate, renew the policy, and file a claim.
Nationwide: Best Overall Commercial Umbrella Insurance
In the 2019 U.S. Small Commercial Insurance Study by J.D.Power, Nationwide came out on top.
They earned top scores in policy offerings, claims, and billing and payment. Interaction and pricing earned four stars (or “wheels of power” in J.D. Power parlance). They are a leading provider of small business insurance, and commercial umbrella insurance can be added to your general liability insurance very easily. You can get a general liability quote online, but to add commercial umbrella to that, you’ll have to call.
Farmers: Best for Personalized Service in Commercial Umbrella Insurance
Farmers offers commercial umbrella insurance in $1 million dollar increments. It can provide up to $10 million dollars in extra coverage on top of the business insurance you already have. They stress personal relationships and support, and the J.D.Power survey backs this up, as they got four stars across the board. To get a quote, you can call an agent and talk to them directly.
Travelers: Best Commercial Umbrella Insurance for Small Businesses
Travelers has more than 160 years of experience providing personal and business insurance. Their commercial umbrella insurance policy has up to $25 million limits for small businesses. Commercial umbrella can cover the gaps in your other business insurance. They have that umbrella logo, so it seems they were predestined to offer commercial umbrella insurance.
Chubb: Best Commercial Umbrella for Mid-to-Large Sized Businesses
Chubb has commercial umbrella insurance policies for every size business, but it’s particularly good if your business has international clients. Policy limits are up to $50 million for commercial umbrella insurance.
What is Commercial Umbrella Insurance?
Think of commercial umbrella insurance as an extra layer of protection, almost like a savings account. You pay your bills from your checking account, but when that runs out of money, you can use the money from your savings account.
How Much does Commercial Umbrella Insurance Cost?
Commercial umbrella insurance is added on to your other liability coverages; it isn’t available as a stand-alone policy. How much more commercial liability insurance costs to add depends on how much risk there is in your field. Healthcare and construction carry more risk and pay more for liability policies.
Insureon says the median annual premium for a commercial umbrella policy is $900 a year.
What Benefits should You Consider for Commercial Umbrella Insurance?
Commercial umbrella insurance can vary quite a bit between companies. If you already have general liability insurance, you should contact your insurer to find out what they charge for commercial umbrella insurance.
An insurer will require that you have at least $1 million in coverage on any underlying policy before you can purchase commercial umbrella insurance.
>>MORE: Best General Liability Insurance for Small Businesses
Do Small Businesses Need Commercial Umbrella Insurance?
Some contracts will require a commercial umbrella insurance policy before they’ll work with certain businesses, as in some IT contracts. Even if clients don’t request it, it’s a good idea to have commercial umbrella insurance in case a lawsuit exceeds what limits you have in your other policies.
What does a Commercial Umbrella Insurance Policy Cover?
Commercial umbrella insurance can increase the limits for:
- Third-party bodily injury
- Third-property property damage
- Commercial Auto accidents
- Employee injury (when you add commercial umbrella insurance to employer’s liability insurance, which is usually included with workers’ compensation)
- Libel, slander, and other defamation related incidents
It doesn’t cover:
- Anything already covered under other insurance, up to the policy limits
- Professional errors
- Employee discrimination lawsuits
- Business property damage
Is Commercial Umbrella Insurance Necessary?
It’s not required, but it could come in handy. Commercial umbrella insurance kicks in when you meet the limits of your other policies. If you never meet the limits of your liability policies, you won’t need commercial umbrella insurance. If you do, you’ll be glad you purchased it.
What Affects the Cost of Commercial Umbrella Insurance for Small Businesses?
How likely there is to be claim on the underlying policy will affect commercial umbrella insurance. Contractors pay the most because they have the highest likelihood of a general liability claim.
Other factors that affect the cost of commercial umbrella insurance are:
- How much exposure to the public you have (lots of exposure to the public increases the likelihood of a general liability lawsuit.
- How many commercial vehicles you have
- How high of a limit you need
How Much Commercial Umbrella Insurance do I Need?
Commercial umbrella insurance will be added to your business general liability, employer’s liability, and/or commercial auto insurance. When purchasing these policies, you should consider:
- how much risk is involved in your business
- how high a deductible you can afford
- what is included in the policy
- what is not covered
- size of your business
- how many employees you have
Lawsuits are increasingly common and the likelihood that you will be sued increases every year. Be sure you understand what is covered by your general liability policy, commercial auto policy and employer’s liability policy before you buy commercial umbrella insurance.
How Much is a $3 Million Commercial Umbrella Policy?
The cost of commercial umbrella insurance increases with the underlying policy. According to insureon, a commercial umbrella policy that cover $3 million dollars is 110% higher than the $1 million dollar policy. The median cost of a commercial umbrella insurance policy with a $1 million dollar limit is $900, so therefore a $3 million dollar policy is $1890.
Different insurance companies will provide you with different quotes. If you want to get the cheapest quote, be sure to shop around with a few companies or with a digital broker like CoverWallet to compare several quotes:
Why is Commercial Umbrella Insurance Important?
It’s difficult to know how much money a lawsuit is going to cost, so it’s hard to know how much business insurance to get. Commercial umbrella insurance will cover you in the event you go over policy limits. However, it only applies to general liability, commercial auto, and employer’s liability. If you’re wondering why you don’t just increase your limits on these policies, you can. But commercial liability can apply to any of them if you exceed your limits, so it’s like a floating policy that kicks in where you need it.
Does Commercial Umbrella Insurance Cover Lawsuits?
Yes. Commercial umbrella insurance covers the same types of costs as business liability insurance does, such as court costs, attorney fees and settlements.
Final thoughts
If you have any doubts about whether your business insurance is enough, consider adding a commercial umbrella policy to your insurance coverage. If it helps you sleep at night, the few hundred dollars a year it costs will be worth it.
