In today’s litigious environment, a commercial umbrella insurance policy provides an extra layer of protection above and beyond your general liability and auto liability limits.
There is a trend called “social inflation,” a term for the rising levels of insurance claim payouts awarded in courts due to juries’ desire to punish the defendant or super-compensate the plaintiff. These awards can quickly outrun your limits of coverage under a standard liability insurance policy. An umbrella policy adds to your total available coverage and picks up once your primary policy is exhausted. An umbrella policy can also help where you have business contracts that require larger limits of liability.
The key to umbrella insurance is making sure it applies to the underlying coverages you already have. An umbrella policy is written to supplement shortfalls in your basic commercial insurance policies. Your agent or broker will work with you to make sure your umbrella coverage dovetails with your other insurance so you get the protection you want.