What Are Commercial Umbrella Insurance Policies?
Primary insurance policies can give businesses robust protections against many different risks, but most commercial policies have limits that determine the maximum amount of coverage they’ll provide. Sometimes, Massachusetts businesses need more protection than their primary policies offer. In these cases, businesses may want to purchase additional protection through a commercial umbrella insurance policy.
Commercial umbrella insurance policies are secondary, or supplemental, liability policies.
As a type of liability insurance, commercial umbrella policies protect businesses from covered incidents in which they’re either accused of being or found responsible for damage or injury that another party sustains. If an individual, business, or other organization suffers a loss because of a business’ actions (or inactions), a policy may help cover any legal costs and settlements associated with the incident.
Being a supplemental form of insurance, commercial umbrella policies generally won’t begin paying for legal fees or settlements until all applicable underlying coverages have been exhausted. For example, if an underlying policy provides $300,000 worth of coverage for an incident, a supplemental policy likely won’t start to cover costs associated with the incident until legal fees and settlements exceed $300,00.
