Commercial Umbrella & Excess Liability Insurance
Additional Liability Protection for Your Business
Some liability claims can become very expensive very quickly. A serious vehicle accident, significant injury or major liability claim can potentially exceed the limits provided by an underlying commercial insurance policy.
Commercial Umbrella and Excess Liability Insurance can provide additional liability limits above certain underlying policies, subject to the terms and conditions of the coverage.
What Is Commercial Umbrella Insurance?
Designed to provide additional liability protection above certain underlying commercial insurance policies. Depending on the policy, those may include:
- General Liability
- Commercial Auto Liability
- Employers Liability
- Other eligible liability policies
What Is Excess Liability Insurance?
Excess Liability also provides additional limits above an underlying liability policy. The terms are sometimes used interchangeably, but they are not always identical.
An excess policy generally follows the terms of the underlying policy more closely, while an umbrella may provide broader coverage in certain circumstances. The actual coverage depends on the policy language.
John Scott Insurance helps businesses evaluate their liability exposures, existing limits and overall insurance program to determine whether additional liability protection should be considered.
What Policies Can a Commercial Umbrella Sit Over?
Depending on the umbrella policy and insurance carrier, eligible underlying coverage may include:
Commercial Auto Liability
Liability protection for certain covered accidents involving insured business vehicles.
General Liability
Coverage for certain third-party bodily injury and property damage claims.
Employers Liability
Commonly associated with Workers’ Compensation policies; may address certain employee-related liability claims subject to policy terms.
Who Should Consider Commercial Umbrella Insurance?
Commercial Umbrella or Excess Liability may be worth discussing for businesses that:
- Own or operate commercial vehicles
- Have multiple employees driving
- Work at customer locations
- Perform higher-risk operations
- Work around the public
- Use heavy equipment
- Work at heights
- Have significant assets
- Work on large projects
- Enter into contracts requiring higher liability limits
- Use subcontractors
- Operate across multiple locations or states
- Have significant General Liability exposures
The need for additional limits depends on the individual business.
How Much Coverage Does My Business Need?
There isn't one limit that's appropriate for every company.
Businesses should consider factors such as:
- Industry
- Business operations
- Number of employees
- Vehicles
- Vehicle size and use
- Job-site exposures
- Work performed
- Contracts
- Customers
- Subcontractors
- Geographic territory
- Existing liability limits
- Business assets
- Potential severity of a claim
Some contracts may also require businesses to carry specific liability limits.
John Scott Insurance can help review both the underlying policies and additional liability options.
How Does Commercial Umbrella Insurance Work?
A simple example: a business has a covered Commercial Auto Liability claim. The underlying policy provides liability coverage up to its applicable limit.
If a covered claim exceeds that limit, eligible Umbrella or Excess Liability coverage may provide additional protection above the underlying policy, subject to its own terms, limits and exclusions.
The umbrella does not replace the underlying insurance. It sits above eligible underlying liability policies.
Claim exceeds underlying limit
Commercial Umbrella / Excess Liability
Additional limits, subject to its own terms & exclusions
Underlying: General Liability · Commercial Auto · Employers Liability
Responds first to a covered claim
Why Would a Business Need Higher Liability Limits?
Businesses can face claims involving:
- Serious bodily injuries
- Multiple injured parties
- Major vehicle accidents
- Significant property damage
- Lawsuits
- Legal defense expenses
- Job-site accidents
- Completed operations
- Contractual insurance requirements
- Other significant liability exposures
A business should consider not only how likely a claim may be, but also how severe a potential claim could become.
Does Commercial Umbrella Cover Everything?
No. It is not unlimited coverage and does not automatically cover every business risk. Coverage is subject to policy terms, conditions, exclusions and underlying insurance requirements.
Certain exposures may require separate insurance, such as:
- Commercial Property
- Equipment / Inland Marine
- Cyber Insurance
- Professional Liability
- Employment Practices Liability
- Other specialized insurance
This is why it's important to review the entire insurance program rather than viewing an umbrella policy by itself.
Does It Cover Damage to My Own Property?
Generally, Commercial Umbrella Insurance is liability coverage.
It is not designed to replace Commercial Property Insurance for damage to your own building, equipment or other business property.
Commercial Property Insurance →
Tools and mobile equipment may also require:
Does It Cover Business Vehicles?
It may provide additional liability limits above an eligible underlying Commercial Auto policy. It does not replace Commercial Auto Insurance.
The underlying policy generally responds first to a covered auto liability claim, followed by eligible umbrella or excess coverage if applicable limits are exceeded.
Commercial Umbrella Insurance for Contractors
Contractors can face significant exposures involving active job sites, employees, subcontractors, heavy equipment, commercial vehicles, work at height, completed operations, customer property, contract requirements and large projects. A serious claim can potentially involve substantial damages.
John Scott Insurance operates Contractors Insurance Agency, a specialized division focused specifically on contractors and construction-related businesses.
Contract Requirements and Higher Liability Limits
Some businesses are required by customers, general contractors, property owners or other contractual partners to carry specific insurance limits. A contract may require limits higher than those provided by the standard underlying policy.
Commercial Umbrella or Excess Liability coverage may be one way to satisfy certain higher-limit requirements.
Review insurance requirements in contracts before work begins.
We don’t just ask, “Do you want an umbrella?”
We want to understand the potential severity of your exposures before discussing additional liability limits.
- What does the business do?
- What could create a severe liability claim?
- What vehicles does it operate?
- Who drives them?
- Does it use heavy equipment?
- Does it work at customer locations?
- Does it work at height?
- What does the business do?
- What could create a severe liability claim?
- What vehicles does it operate?
- Who drives them?
- Does it use heavy equipment?
- Does it work at customer locations?
- Does it work at height?
What Policies Can a Commercial Umbrella Sit Over?
Depending on the umbrella policy and insurance carrier, eligible underlying coverage may include:
What is Commercial Umbrella Insurance?
Commercial Umbrella Insurance can provide additional liability limits above certain eligible underlying business insurance policies, subject to policy terms and conditions.
What is the difference between Umbrella and Excess Liability Insurance?
Both can provide additional liability limits. Excess Liability generally follows the underlying policy more closely, while an umbrella may provide broader coverage in certain situations. Actual coverage depends on the specific policy.
Does my business need Commercial Umbrella Insurance?
That depends on the business's operations, vehicles, contracts, existing liability limits and potential severity of claims.
Does Commercial Umbrella replace General Liability Insurance?
No. The umbrella generally sits above eligible underlying liability coverage. The underlying policy remains necessary.
Does Commercial Umbrella cover auto accidents?
An umbrella may provide additional liability limits above an eligible Commercial Auto policy for certain covered claims, subject to policy terms.
Does an umbrella cover Workers' Compensation claims?
Workers' Compensation benefits themselves are generally separate. An umbrella may provide additional limits over eligible Employers Liability coverage depending on the policy.
Does Commercial Umbrella cover my building or equipment?
Generally, no. Commercial Umbrella is liability coverage. Commercial Property and Equipment / Inland Marine coverage address different property exposures.
Can an umbrella help meet contract insurance requirements?
Potentially. Businesses that are required to carry higher liability limits may use Umbrella or Excess Liability coverage as part of their insurance program, depending on the contractual requirements and policy.
How much Commercial Umbrella coverage should my business carry?
There is no single amount appropriate for every business. Operations, vehicles, contracts, assets and potential claim severity should all be considered.
Is Commercial Umbrella Insurance only for large companies?
No. Smaller businesses can also have significant liability exposures. Business size alone doesn't determine whether additional liability limits should be considered.
Commercial Umbrella as Part of Your Business Insurance Program
One layer within a broader program. Depending on the business, that program may include:
Explore Business InsuranceCommercial Umbrella Insurance Across the Midwest
John Scott Insurance works with commercial clients throughout:
Michigan | Indiana | Illinois | Wisconsin | Iowa | Minnesota
Businesses operating in multiple states should discuss their full operations and contractual requirements with their insurance professional.
Add Another Layer to Your Business Liability Protection
Your underlying policies provide important protection, but some businesses have exposures where a serious claim could potentially exceed those limits.
John Scott Insurance can help you review your current liability coverage, business operations and potential claim severity to determine whether Commercial Umbrella or Excess Liability Insurance should be part of your overall program.