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do you need commercial umbrella insurance? image shows business owner at the door of her business


Your business may need protection over and above what you already have, so it’s important to look into the benefits of commercial umbrella insurance.

What is Commercial Umbrella Insurance?

Simply put, commercial umbrella insurance is purchased in addition to your existing liability business insurance to provide additional protection.1

  • It is a form of liability insurance that covers your business when your general liability, auto liability, or other insurance coverages do not cover all damages against you.
  • Most umbrella policies require that you have underlying insurance coverages in force.
  • It protects your business when your primary liability insurance limits are exceeded, for example, if your business is faced with an exceptionally costly accident or large lawsuit that may exceed the limits of your underlying liability policies.
  • Once your primary insurance policy’s limits are reached, commercial umbrella would pay for liability claims, up to the limit for the umbrella policy.2
  • Commercial umbrella may pay for certain types of losses that aren’t covered by the underlying policies.3

Who Needs Commercial Umbrella Insurance?

  • Businesses that own substantial assets that need to be protected in a lawsuit.4
  • Companies with high-risk exposures including high net-worth clients or companies where employee injuries are more likely to occur.
  • Retail storefront businesses, where more interactions with the public take place.
  • Businesses involving deliveries or a lot of driving as car accidents are a common source of liability claims.
  • Businesses required to carry a high liability policy limit to work with a certain client.5

What Materials Should I Present to My Independent Insurance Agent?

  • Basic financial information and details about your business.6
  • Copies of existing related insurance policies (general liability, auto liability, workers’ compensation, and other liability insurance policies you have, such as employment practices liability or professional liability).
  • Past loss or claims information about your business.
  • Information about the company’s owners/officers, including their titles and experience in the business.
  • Employment information, such as payroll and the number of full-time and part-time employees and contractors your business has.

How Much Does Commercial Umbrella Insurance Cost?

  • Pricing for commercial umbrella insurance is based on the individual risks your business has. Insurers consider factors such as industry, location, number of employees or vehicles, coverage limits, and so on. Various limits are available.

What Doesn’t a Commercial Umbrella Policy Cover?

  • Commercial umbrella policies usually don’t cover punitive damages or personal liability claims. It is crucial to consult your policy and your independent insurance agent for complete details on policy exclusions.


  • The inception and expiration dates of all underlying (primary) and umbrella polices should be the same to prevent any coverage gaps.7


Protect yourself and your business against a significant financial loss with commercial umbrella coverage. Visit Merchants’ commercial umbrella product page, or contact one of our independent insurance agent partners for more information. 



*Originally published June 18, 2021


1, 4, 6. Advisor Smith

2, 5. Insureon

3, 7. The Balance

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Erica Dalton

Merchants Insurance Group

Merchants Insurance Group sells its products through a network of more than 1,000 independent insurance agents in Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Vermont. We sell our products through independent insurance agents because we believe they provide value to policyholders through their broad range of products and their insurance expertise.