Commercial Umbrella Insurance

Umbrella liability insurance provides excess liability coverage over several of the business’s primary liability policies. Most umbrella liability policies provide coverage that is broader than the business’s primary policies. The policy usually states it will pay the ultimate net loss, which is the total amount in excess of the primary policy limit for which the business becomes legally obligated to pay for damages of bodily injury, property damage, personal injury, and advertising injury.

Following are different types of coverages:

• Limits of Insurance
  All umbrella liability policies contain an each occurrence limit of insurance meaning the policy will pay a maximum amount for each claim reported. Some umbrella liability policies may have a separate limit that applies to all personal and advertising injury for one person or for the organization.
• Pay on Behalf
  This is a coverage used in some umbrella policies. The agreement promises to make direct payment on behalf of the business for those sums of money the business becomes legally obligated to pay because of liability imposed upon the business by law, or assumed under contract.
• Indemnity
  This is the insuring agreement clause found in most umbrella policies as opposed to the pay on behalf agreement. When the indemnity insuring clause is used, the insurance company will reimburse the business for those sums of money the business becomes obligated to pay by reason of liability imposed upon the insured by law, or assumed under contract.

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