Umbrella coverage is designed to sit on top of commercial general liability (CGL), commercial auto insurance (or hired and non-owned auto), workers compensation, employee benefits liability, and often provides umbrella protection over several locations and properties.

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Virtually any business can benefit from holding the excess liability coverage that an umbrella policy provides. Accidents happen, and there’s always a chance of encountering a lawsuit that exceeds policy limits for your existing liability coverage.  You need to evaluate your budget (and other factors) to determine whether commercial umbrella insurance is a worthwhile investment for your company. In essence, this type of coverage is a form of risk management, so you need to assess your level of liability risk. 

 

In addition, there may be certain contractual situations that require your business to hold commercial umbrella insurance. If your business has a government contract, for instance, the contract will likely mandate that you carry this type of coverage.