Commercial Umbrella Insurance

Yes, in some circumstances commercial umbrella coverage may be required.

Some clients and agencies require a certificate of insurance (also called a COI, or proof of insurance) that includes $2 million in coverage or more before they’ll work with you. Or if you want to rent a property for your business, such as a store, shop, office space, warehouse or storage facility, some commercial landlords require you to carry small business umbrella insurance as part of your commercial lease.

A commercial umbrella policy on top of your ERGO NEXT general liability policy may help satisfy these kinds of requirements.

ERGO NEXT’s business umbrella insurance coverage, also called umbrella and excess liability insurance in some states, offers a higher insurance policy limit (the maximum amount your insurer will pay for a claim) than general liability insurance alone.***

If you file a claim on your small business insurance, the limit of your general liability policy must be exhausted first. If the loss exceeds your general liability limits, then the umbrella coverage could kick in as an extra layer of liability protection to cover additional losses up to the excess limit (up to $4 million).

A business umbrella policy could help protect your business from unexpected expenses that could lead to lawsuits, such as:

• Damage your business causes to another person’s property.
• Injuries to non-employees.
• Advertising harm.
• Accusations of libel or slander (also called personal injury or reputational harm).

A business umbrella insurance policy can add up to an additional $2 million beyond your existing ERGO NEXT general liability policy limit. That means that combined coverage with both types of policies could be up to $4 million.

For example, let’s say there’s a $2 million judgment against your business for covered damages. If your general liability policy limit is $1 million per occurrence, that insurance will cover the cost of the first million dollars in damages. Your business umbrella policy could then kick in to cover the additional $1 million in damages to make you whole.

Note that in Illinois, Nevada, New York, Texas, Utah, Colorado, Pennsylvania and Mississippi ERGO NEXT refers to this coverage as excess liability insurance rather than commercial umbrella in accordance with state requirements.

Commercial umbrella insurance and excess liability insurance both provide additional liability coverage above the limits of an underlying general liability insurance policy.

These terms are sometimes used interchangeably, but they can refer to different types of coverage depending on the insurer and policy.

At ERGO NEXT, for Illinois, Nevada, New York, Texas, Utah, Colorado, Pennsylvania and Mississippi, excess liability insurance is the more common term for this type of business insurance policy. In other states, we refer to this coverage as commercial umbrella insurance.

A small business commercial umbrella insurance policy could cover expenses related to property damage, but only for property that does not belong to you.

Commercial property insurance could help protect the physical items that your business owns for operations, such as:

• Inventory and products.
• Business equipment, including laptops, POS systems and machinery.
• Furniture, flooring and furnishings.
• The building itself that you rent or own.

ERGO NEXT small business umbrella insurance does not cover automobile liability or any expenses related to business or personal driving.

Commercial auto insurance could help cover expenses if you drive for business reasons, such as:

• Injuries if you’re responsible for an accident.
• Property damage your vehicle causes to other people’s property.
• Repairs for your business car, truck, van or trailer.
• Towing and rentals if your vehicle is damaged.

Small business umbrella insurance doesn’t cover the theft of your own possessions. But it might cover the theft of customer property.

Let’s say you’re repairing a garage door for a homeowner and someone steals their car while you’re working. A commercial umbrella policy could help pay if you’re found liable for the loss.

If any of your personal or business items are stolen, you won’t be covered without additional insurance.

Businesses like contractors or a cleaning business might consider tools and equipment insurance in addition to business umbrella insurance for contractors to help protect their goods if they’re damaged or stolen on the job.

Commercial umbrella insurance coverage could help pay for expenses if your business is accused of causing an injury to a non-employee, but injuries to you or your employee are not covered.

Workers’ compensation insurance could help pay for medical expenses and lost wages if an employee is hurt on the job.

Many states legally require you to buy workers’ comp as soon as you hire an employee. Business owners could also be covered if they get hurt while working if they buy optional business owner’s coverage for themselves.

Business umbrella insurance coverage doesn't protect your business from every type of loss. For example, ERGO NEXT commercial umbrella insurance won’t cover:

• Damage to your own business property.
• Automobile liability or driving-related expenses.
• Injuries to you or your employees.

Commercial umbrella insurance coverage generally works to extend your general liability coverage, but it doesn’t replace other types of business insurance like commercial property, commercial auto or workers’ comp.

Small business umbrella insurance isn’t one-size-fits-all. Each business is unique and has different insurance needs.

The commercial umbrella coverage you need depends on a number of factors, including:

• The requirements of a client contract.
• The type of work that you do.
• Your level of business risk.
• How many employees and subcontractors you have.
• The state where you work.
• Your claims history.
• The level of coverage that you choose.

Start a free, no-obligation business umbrella insurance quote with ERGO NEXT.

Commercial umbrella insurance premiums can typically be deducted from your taxes.

The IRS categorizes payments you make for this type of insurance to be both an “ordinary and necessary” business expense. Be sure to keep a file of how much you pay every year for your policy. And consult with a licensed accounting professional to make sure you qualify.

Forming an LLC can help separate your personal and business assets, but it doesn't eliminate your business's liability risks. Umbrella insurance for LLC businesses could provide additional liability protection when a covered claim exceeds the limits of your underlying general liability policy.

Whether you need umbrella insurance for an LLC depends on factors such as your industry, your exposure to customers and other third parties, and any specific insurance requirements in your contracts or commercial leases.

Even a small business can face a liability claim that exceeds its general liability limits. Umbrella insurance coverage for a small business could provide you with an additional layer of protection against covered losses that would otherwise be paid out of pocket.

Small business umbrella insurance may be especially useful if your business works with the public, works on expensive property, faces higher liability risks or needs additional limits to meet contract or lease requirements.

No. ERGO NEXT commercial umbrella insurance is only available as an add-on to your ERGO NEXT general liability policy. General liability provides your primary coverage, while commercial umbrella insurance coverage could provide an additional layer of protection after the applicable general liability limit has been reached.

You can get a general liability and business umbrella insurance quote online to see your coverage options and the real cost.

You can get a business umbrella insurance quote online with ERGO NEXT in about 10 minutes. You'll see your exact price before you decide to buy, and you can get your certificate of insurance (COI) immediately after payment. And the process from quote to purchase to covered is 100% online.

You must have an ERGO NEXT general liability policy to add business umbrella insurance.

It takes about 10 minutes to get a quote, buy coverage and get access to policy documents and your certificate of insurance (COI).

You can access your documents and COI 24/7 online or in the ERGO NEXT app for iPhone or Android.

You can file a claim anytime online or in the ERGO NEXT app.

You’ll be asked to share the details of what happened and to provide relevant photos and documentation. We strive to make claims decisions as quickly as possible so you can get back to work.

Learn how to file a claim.