Commercial Umbrella Insurance

How a Commercial Umbrella Works

• Sits Over Multiple Policies: Commonly over General Liability, Business Auto Liability, and Employers Liability from Workers’ Comp.
• Excess Limits: Kicks in after underlying limits are exhausted (e.g., after a $1M GL limit is used).
• Follow‑Form (Often): In many cases mirrors the underlying terms/exclusions; always review the umbrella form.
• Self‑Insured Retention (SIR): If the umbrella covers a claim not covered by an underlying policy but included in the umbrella, a small SIR may apply.
• Required Underlying Minimums: You must maintain certain base limits (e.g., GL/Auto at $1M) for the umbrella to respond properly.

Good to know: A commercial umbrella is about severity—rare, catastrophic losses. It can also make your bids more competitive by meeting client limits.

Claim Scenarios

• Auto Catastrophe: Multi‑vehicle crash causes severe injuries. Primary Auto Liability pays the first $1M; the umbrella covers above that up to its limit.
• Premises Injury: Customer suffers life‑altering injury at your location. GL is exhausted; umbrella adds additional protection.
• Products Liability: A defective product triggers multiple large injury claims across states. Umbrella provides extra capacity.

Who Needs a Commercial Umbrella?

• Contractors & Construction (jobsite requirements, third‑party injury potential)
• Trucking & Logistics (auto severity, shipper contracts)
• Property Owners & Landlords (slip‑and‑fall exposure, lender/lease requirements)
• Restaurants & Food Service (premises and liquor liability needs)
• Manufacturers/Wholesalers (product liability severity)
• Retail & Events (crowds, vendor/venue contracts)

Contract Requirements & COIs

Large clients, municipalities, and landlords often require $2M–$5M+ liability limits and specific endorsements. We’ll help you:

• Review contracts and bid specs for exact insurance wording
• Issue fast COIs with Additional Insured / Waiver of Subrogation
• Coordinate umbrella placement across GL, Auto, and Employers Liability

What an Umbrella Typically Doesn’t Cover

• Professional liability/E&O (buy separate coverage)
• Workers’ Comp benefits themselves (umbrella may sit over Employers Liability, not WC benefits)
• Your own property damage (that’s property insurance)
• Contractual liability beyond what’s covered by the underlying
• Intentional/expected injury or damage

Always check your actual policy forms for specifics.

How Much Limit Should I Buy?

• Contract/Lease Specs: Start with what your clients, landlords, or municipalities require.
• Worst‑Case Scenario: Consider auto severity, foot traffic, and product exposures.
• Industry Benchmarks: Many small businesses consider $1M–$5M; higher‑hazard ops may go $10M+.
• Budget & Deductibles: Umbrella is often cost‑effective per $1M compared to raising base limits.

Frequently Asked Questions

Umbrella vs. Excess Liability—what’s the difference?

An umbrella often provides broader “follow‑form” protection across multiple policies and may drop down in certain cases with an SIR. Excess typically sits over a single policy. Terms vary—ask us which fits your needs.

Do I need to increase my underlying limits?

Yes—you must maintain the carrier’s required underlying limits (e.g., GL/Auto $1M). Failing to do so can leave gaps.

Can an umbrella satisfy a client’s $5M requirement?

Often yes. Example: GL $1M + Umbrella $4M = $5M total for covered claims that follow form. We’ll confirm wording and issue the COI.

Will it cover liquor or professional services?

Not automatically. Umbrella generally follows underlying. If liquor or professional liability isn’t in the base policy, the umbrella won’t add it. Get separate liquor/E&O and consider umbrella over those if available.

Ready to Lift Your Limits?

We’ll review your current policies, contracts, and risk profile—then recommend an umbrella limit that fits your operations and budget.

Call (209) 701‑6900 Book a Time

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JSSR Insurance Agency — Our Knowledge, Your Success.