A Guide to Commercial Umbrella Insurance

October 11, 2021

If you own a business in Louisiana, it’s important to know if your current insurance policies are covering you for everything you think they do. Whether it’s a lower policy limit than expected or a certain exclusion, insurance claims can cripple your business with out-of-pocket costs and put you at serious financial risk if you don’t have the right policies in place. This is where a commercial umbrella insurance policy can help.

What is Commercial Umbrella & Excess Insurance

A commercial umbrella insurance policy is a supplemental policy that sits on top of your other policies. Its role is to cover costs of claims that are more than your individual policy limits (excess liability coverage). For example, if you’re a Louisiana business and have a general liability insurance policy with a $500,000 limit, umbrella insurance would help cover a determined amount over $500,000.

Commercial umbrella insurance also helps cover claim costs for certain exclusions that are not covered in your primary insurance policies (gap coverage). It’s also important to note that umbrella insurance can typically only be added to commercial auto, worker’s compensations, and general liability insurance policies.

What Does Commercial Umbrella Insurance Covers

Now that we know what commercial umbrella insurance is, let’s talk about what it covers. Since it is used to enhance liability coverage for one or all of the three policies previous mentioned, commercial umbrella insurance typically covers most of the same things as these policies. For example, an umbrella policy may help when:

  • Your business is sued for slander or libel.
  • Your company accidently uses a copyrighted image or video without having the proper rights.
  • A defective product you manufacture causes injury to a customer
  • A person is injured as a result of an auto accident with one of your company vehicles.
  • You damage a customer’s property due to business operations.

Some commercial umbrella policies will also cover legal fees that are not covered in one of your primary policies.

What to Consider Before Purchasing Commercial Umbrella Insurance

If you think a commercial umbrella insurance policy may be right for you, the best thing to do is talk to an independent insurance agency, like Lewis Mohr Insurance Agency, where they can assess your unique needs. However, here are a few things to consider:

  • Commercial umbrella insurance is not a standalone policy and won’t come into effect until your primary policy runs out. Therefore, you need to ensure you have the correct primary policy.
  • When you have a commercial umbrella insurance policy you need to confirm the claims process. Some require you to file two separate claims while others apply automatically.
  • There are many things commercial umbrella insurance will not cover. Such as damage to your property, professional errors, or certain lawsuits.

In conclusion, commercial umbrella insurance is there to pay for the things a primary insurance policy can’t pay on its own. And with the risk of getting sued increasing in recent years and large settlements becoming more common, an umbrella policy is important to consider. Please contact us so we can help you decide if a commercial umbrella insurance policy is right your Louisiana based business.

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