Many businesses are exposed to high potential liability risks, for they could be held financially responsible if another party suffered harm. Should a Massachusetts business face an expensive liability lawsuit, having commercial umbrella insurance could be helpful.
Commercial umbrella insurance gives businesses additional liability protection beyond what primary policies afford. Coverage can greatly increase limits on covered lawsuits.
Since almost any business could be named in a liability lawsuit, many Massachusetts businesses may find the liability protections of commercial umbrella coverage helpful.
Businesses may want coverage regardless of their industry and size, for virtually every business has some notable risks to consider:
An insurance agent who’s well-versed in liability risk and coverage can help businesses more fully evaluate how commercial umbrella coverage may help them.
The additional protection that commercial umbrella coverage offers may supplement commercial property, commercial auto or other primary coverage. Most umbrella policies stipulate minimum liability coverages that must be in place through a primary policy.
A primary insurance policy normally provides the first line of defense for covered claims. The policy’s liability limit will probably be exhausted before any secondary umbrella policy begins paying on a claim that both the primary and secondary policy cover.
For example, consider how the costs of a $2 million liability lawsuit may be covered. The business has a primary policy with $1 million of coverage and a $3,000 deductible, and an umbrella policy with $3 million of coverage:
Secondary policies are sometimes also called supplemental policies, and primary policies are also underlying policies.
Excess liability coverage and commercial umbrella coverage both generally provide supplemental liability protection, over and above what primary insurance policies offer.
Excess liability primarily increases the liability limits of only one primary policy. The excess liability policy normally adopts the terms and conditions of the underlying policy.
Commercial umbrella coverage is usually its own policy, adding on liability coverage by providing higher limits. As its own policy, commercial umbrella terms may be adjusted to increase multiple primary policies’ limits and may fill in coverage gaps.
Commercial umbrella provides a more robust coverage in most cases, but there are times when excess liability offers the necessary protection at a more affordable rate. An experienced insurance agent can help businesses determine which option is best for their situation.
Commercial umbrella policy premiums vary depending on the precise claims that are covered, the amount of coverage chosen, and factors relating to the business. These policies typically provide extensive protection at quite affordable rates, however, because they’re mainly a secondary line of defense.
For help purchasing commercial umbrella insurance in Massachusetts, contact the independent insurance agents at Garrity Insurance. Our agents can help make sure you have both primary and secondary policies that will protect your company well, and we can recommend the best combinations regardless of which insurance company offers them.