We offer Commercial Umbrella Insurance coverage in Massachusetts, Maine, New Hampshire, Rhode Island, Maine, New York and Florida.
Please ask one of our agents how we can provide you with insurance across multiple states.
What is commercial umbrella insurance?
Primary liability insurance policies can provide businesses with substantial protection against liability risks, but sometimes even substantial isn’t enough. Commercial umbrella insurance may give Massachusetts businesses even more protection against expensive lawsuits.
Commercial umbrella insurance normally provides additional liability protection beyond what primary insurance offers. Getting coverage may increase protection against expensive lawsuits by millions.
When does it make sense for Massachusetts businesses to get business umbrella insurance?
Business umbrella insurance is one protection that almost every Massachusetts should consider. Any business can be sued, and major lawsuits can result in extremely high attorney fees and settlements.
Some businesses may want to forgo this additional coverage, thinking they have enough coverage through their primary liability policies. There’s almost no limit to how much a business can be sued for, especially if multiple parties are harmed or there’s a death. Merely paying to defend against such lawsuits can be expensive, not to mention how much a settlement could be.
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Here are a few examples of how different businesses might benefit from having this coverage:
What is a primary underlying insurance policy?
A primary insurance policy normally serves as the first line of defense against covered claims. Its liability coverage is normally drawn from first, with a commercial umbrella policy’s coverage only being used once the primary policy’s applicable limit is exceeded. In this way, the coverage of a primary policy underlies that of an umbrella policy.
To see how a claim might payout, assume a covered liability lawsuit of $2.5 million. The business maintains a $1 million primary liability policy, and a $3 million commercial umbrella policy. The primary insurance policy has a deductible of $5,000. The umbrella policy’s underlying requirement is met by the primary policy. In this case, the claim might payout as follows:
- The business pays the first $5,000 (it’s deductible)
- The primary policy pays the following $1 million (up to its limit)
- The umbrella policy pays the remaining $1,495,000 (up to the claim amount)
Most umbrella policies have underlying coverage requirements that must be met by primary insurance policies. An insurance agent who specializes in commercial liability will be able to make sure all required underlying policies are in place.
Is commercial umbrella different from excess liability?
Both commercial umbrella coverage and excess liability coverage can provide supplemental liability protection, adding onto that of an underlying policy. They differ in how many policies they supplement, however.
Excess liability is normally tied to only one primary policy. It usually adopts the terms of the underlying policy, providing higher limits but no broader protections. In this way, excess liability might provide add more protection onto a single policy.
Business umbrella insurance is normally more comprehensive. It usually comes with its own terms, allowing it to supplement multiple policies and even add broader coverages. Not only can commercial umbrella effectively increase the limit of multiple underlying policies, but it also may fill in coverage gaps.
An insurance agent who knows commercial umbrella policies will be able to assist in deciding which supplemental liability policy is right for a business.
How much do insurance companies charge for business umbrella insurance?
The cost of business umbrella insurance varies based on the coverage details, amount of coverage selected, underlying policies, and other factors. These policies may provide a substantial amount of protection for a comparatively small premium, though. Most policies add at least $1 million in liability protection, and some provide much more.
Where can Massachusetts businesses find commercial umbrella insurance?
For help with commercial umbrella insurance, contact the independent insurance agents at Coonan Insurance Agency. Our Massachusetts agents will work with you to ensure your business is well protected against potential liability risks, including with commercial umbrella and other liability coverages.
