COMMERCIAL UMBRELLA INSURANCE IN MASSACHUSETTS

What is a primary insurance policy?

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:

• The first $3,000 probably would be paid by the business
• The next $1 million probably would be paid by the primary policy
• The remaining $997,000 would probably be paid by the secondary umbrella policy

Secondary policies are sometimes also called supplemental policies, and primary policies are also underlying policies.

Does commercial umbrella coverage and excess liability coverage mean the same thing?

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.

How much are premiums for commercial umbrella policies?

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.

How can businesses located in Massachusetts get quotes for commercial umbrella insurance?

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.