Protect your company should a claim exhaust your general (or other) liability coverage, or fall into a coverage gap.

Commercial Umbrella Liability Insurance can be a great solution for a business that needs more liability coverage than what is offered in their General Liability, Employer’s Liability or Auto Liability Plan. Umbrella coverage can be purchased as a standalone policy or can be bundled with a General Liability policy.

A smartly crafted lead umbrella insurance policy is one of the main lines of defense in today’s increasingly litigious society. The rise in the number of lawsuits and size of jury verdicts impose a heavy financial burden on many businesses large and small. In Canada, many judgments result in a finding of joint and several liability, which means an individual may be only one per cent negligent but end up paying 100 per cent of the judgment if the others named in the suit do not have assets or insurance. Commercial Umbrella Liability coverage provides effective protection against large losses and potential coverage gaps for a range of exposures.

An Umbrella Liability policy provides limits to supplement those of a Commercial General Liability (CGL) and Automobile policy, as well as additional liability coverages not contained in the CGL. The term “umbrella” is derived from the fact that it is a separate policy over and above any other basic liability policies.

All types of companies would benefit from Umbrella Liability. Because it extends coverage at a relatively small additional cost, many choose to pay the extra price.

• you’re in a high-risk or high liability industry: Professionals who run high risk or high liability businesses or have employees who are in danger, such as the legal trade, may invest in Umbrella Insurance to protect themselves against professional liability suits.
• If you’re interested in expanding your existing coverage limits: Policyholders who want to extend the coverage of multiple policies may find it both more convenient and less expensive to expand them all at once through an Umbrella Insurance policy.
  
• If you’re concerned about potential gaps in your coverage: Umbrella Insurance policies offer an additional layer of protection by providing insurance for liability issues that may fall into coverage gaps.
  

Commercial Umbrella Liability Insurance protects your business from holes or limits in existing policy coverage as well as from financially draining lawsuits. Just as you carry an umbrella to protect you from a potential downpour, Umbrella Liability protects your company from the types of claims that could close your business. Businesses choose Umbrella Liability to back up the limits contained in their underlying liability policies (commercial general liability, business auto, employer liability, and professional liability.) For the most part, it is used to cover exceptionally large events or losses with low probabilities of occurrence. Without Umbrella Liability, these events – as few and far between as they may be – would be financially devastating to many companies.

Excess Liability – will cover any excess liability over the coverage caps of your basic insurance policies. These policies may include Commercial Automobile, Professional Liability, and General Liability. A Commercial Umbrella policy will only kick in one these basic policies have hit their coverage caps. It essentially acts as additional coverage over the other covered amounts.

Here’s how it works:

• Assume a jury ordered your business to pay $3 million in damages for a liability claim, but your general liability policy has a $2 million limit. Your company would normally be required to cover the additional $1 million. However, with a $4 million Umbrella Liability policy, the $2 million commercial policy would exhaust itself, and then the Umbrella policy would cover the outstanding $1 million.

Coverage Gaps – covers a broader scope of liabilities that may fall into a gap. This can include a variety of legal fees and costs related to issues, such as libel and slander. These forms of coverage may differ depending on the specific policy you decide to go with.

Additional Limits – GL, Commercial Auto, and Workers Comp are the lines of coverage most often associated with an Umbrella policy. Umbrella Liability only insures you for additional limits based on the coverage in the underlying policies. An umbrella can exclude coverage for sub-limited incidents, double the sublimit, or include coverage up to the full limit of the umbrella.

Additional liability insurance is inexpensive when compared to the added coverage you gain. Depending on the policy value and risk factors the cost can vary greatly.

Contact CMB Insurance Brokers today to learn about the Umbrella Liability coverage solution that’s right for you.