Read our complete guide to find out everything you need to know about umbrella insurance for your contracting business.
- What is commercial umbrella insurance?
- What does commercial umbrella insurance cover?
- Who needs commercial umbrella insurance?
- How much does commercial umbrella insurance cost?
- How much commercial umbrella insurance do I need?
- How do I get commercial umbrella insurance?
What is commercial umbrella insurance?
Commercial umbrella insurance, sometimes called excess liability insurance, is a type of insurance that covers your business in the event your business causes a very serious accident or major property damage. If your business causes damages that exceed the limits of your commercial general liability policy or your commercial auto policy, having an umbrella policy can provide additional insurance coverage.
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What does commercial umbrella insurance cover?
Umbrella insurance covers the same types of liability your primary insurance policies provide and simply increases the coverage to a higher dollar amount. If your underlying coverage is ever exhausted due to a large settlement or multiple claims in a policy year, then the umbrella policy will cover the rest, up to the coverage limit for the umbrella policy.
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Who needs commercial umbrella insurance?
There are several reasons why your contracting business might want to have umbrella insurance, such as:
- It is common for a commercial general liability policy to offer $1 million in liability coverage as a standard coverage. On certain large contracting projects, however, your clients may require a higher limit of liability. You can raise the limits of your general liability insurance, or leveraging umbrella insurance may be a more affordable way to meet this requirement.
- If your business has substantial assets, such as financial assets, machinery, equipment, land, or buildings, umbrella insurance is a great way to protect the value of your investment in your business.
- Contractors who have heavy trucks or machinery that travel on public roads may want to have umbrella insurance as large vehicles can easily cause death or injury in a crash. Vehicle crashes are a common source of liability insurance claims.
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How much does commercial umbrella insurance cost?
The cost of commercial umbrella insurance depends greatly on the industry of your business, risk exposures, and coverage amount. While the range of pricing can vary widely, most small business owners can expect to pay annual premiums between $750 and $1,500.
How much commercial umbrella insurance do I need?
How do I get commercial umbrella insurance?
There are many factors to consider when purchasing commercial umbrella insurance—from the financial strength of an insurer to the pricing that you’re offered. Umbrella insurance is a fairly custom product, as coverage needs differ from business to business, so it is particularly important to select an insurance provider that can build custom coverage to fit your project needs.
When selecting an insurance company, there are three main factors you should look at:
- The financial strength of the insurer
- Reputation for customer service
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