Even if you carry General Liability Insurance for your business, you might face a repair, settlement, or judgment in excess of your coverage limit. Without Business Umbrella Insurance (also sometimes called Umbrella Liability Insurance or Excess Liability Insurance), you would have to pay the uncovered expenses out-of-pocket.

How Does Business Umbrella Insurance Protect Your Business?

For a single premium, a Business Umbrella policy adds another layer of protection to any of several other policies that you might carry, including General Liability, Employer's Liability, and Hired and Non-owned Auto Liability policies. For instance, if you have $1 million in General Liability coverage and a covered claim is settled for $1.5 million, your Business Umbrella Insurance policy would pick up the $500,000 not covered by your General Liability policy.

Do I Need an Umbrella Policy?

As a small-business owner, you may be able to protect more of your assets by investing in an umbrella policy than you would with ordinary insurance. If you face a legal settlement for an amount in excess of your standard insurance, an umbrella policy could protect you from having to drain your bank account and sell your assets to cover the cost.

The main benefit of purchasing Business Umbrella Insurance, rather than opting for higher limits on your existing policies, is that Umbrella Insurance tends to be more cost-effective: you can spend less each month on premium payments to enjoy significantly greater insurance protection. In addition, you can expand your coverage limits on several policies through a single Umbrella policy. For example, instead of investing in higher limits on General Liability, Auto Liability, and Employer's Liability policies, you could invest in a single Umbrella Liability policy that offers extended coverage on all three.