Umbrella/Excess Liability Insurance
Umbrella Liability (also known as Excess Liability) gives you additional coverage when a claim exceeds an underlying policy's maximum limits. For example, if your General Liability policy provides $2 million in coverage, but your claim settlement calls for $2.5 million, your umbrella policy would cover that additional half-million dollars.
For a single premium, you can add an Umbrella Liability policy to your General Liability, Hired and Non-Owned Auto Liability, and Employer’s Liability coverage. However, umbrella coverage cannot be used to supplement a Professional Liability policy.
Umbrella Liability coverage may be described in your contract this way:
"Commercial Excess Liability Insurance in the amount of $1,000,000."
The primary characteristic of umbrella protection is an additional amount of liability insurance, in increments of $1,000,000, that is excess over automobile liability, "basic" general liability, and employer’s liability coverage.
An incident that is likely to require the additional coverage is auto accidents that occur while an employee is driving on company business. The catastrophic results of car/truck accidents on highways and local roads underscore the need by every business for high limits of liability insurance.
The high limits provided by an umbrella policy are a sound recommendation for companies focused on reducing chances of being responsible for a claim over and above policy limits.