What Is Commercial Umbrella Insurance

How Does Commercial Umbrella Insurance Work?

Commercial umbrella insurance gives the insurer to pay for costs that exceed the liability limits mentioned in the policy. Without this coverage, one has to pay out of their pocket for certain claims, such as 

Medical expenses

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Legal costs

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Judgment and settlements

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Third-party property damage

How does it work?

A commercial umbrella policy enhances the limits of the basic liability insurance policies like commercial auto insurance and general liability insurance. Suppose an employee gets involved in an auto accident while among a delivery to a customer. The cost of car damages and the body damages to the person exceeds the commercial car liability limit of the commercial business. This company is bound to pay the excess amount beyond the policy limits. By having umbrella coverage, one can protect themselves from financial risk.

Coverage by a Commercial Umbrella Cover Policy The policy helps to cover claims relating to

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Property damage caused by the business to a third-party belonging

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Bodily injury to the employee or the customer

Commercial umbrella insurance is over and above a general liability policy and provides top-up cover, if anybody who does not have general liability policy will not be able to buy commercial umbrella insurance.

Who should purchase this policy?

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For someone whose business interactions with customers and clients in person are more, the higher is the liability risk. The risk to employers is more if their employees use dangerous and heavy equipment.

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If the chances of claim amount are more than the existing liability insurance policy limits, it is better to buy a Commercial Umbrella Insurance.

Cost of a Commercial Umbrella insurance The commercial umbrella insurance cost depends on various factors such as 

Amount of existing Business Insurance

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Type of business

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Business size

Some industries, such as the construction business, face more risks than others, so the insurance cost is more.