Commercial Umbrella Insurance in Vermont
What is Commercial Umbrella Insurance?
Business umbrella insurance, as this insurance is sometimes called, is a secondary liability insurance. As a form of liability insurance, business umbrella coverage protects businesses in covered situations where they’ve either caused personal injury or property damage, or are accused of causing injury or damage. The other party may be an individual, another business, or some other entity. Policies usually cover both legal fees and settlements associated with covered suits (up to policies’ limits).
As a type of secondary insurance, business umbrella coverage provides supplemental protection that goes beyond what primary, underlying policies offer. For example, business umbrella policies might have higher limits and fewer exclusions than an underlying commercial property, commercial auto or general liability policy (these are just a few examples of policies that may function as primary policies).
How Are Commercial Umbrella Insurance and Excess Liability Insurance Different?
Commercial umbrella and excess liability insurance are both types of supplemental commercial liability insurance. They aren’t identical, though.
Commercial umbrella policies usually have their own terms, conditions and exclusions, which can sometimes be adapted to a particular business’ needs. Because they have their own terms, conditions, and exclusions, commercial umbrella policies don’t have to follow the terms, conditions, and exclusions of one specific underlying policy. Instead, they can be used to fill in coverage gaps of underlying policies, and they can simultaneously supplement multiple underlying policies.
Excess liability policies are generally “follow form” insurance policies, which means they copy the terms, conditions, and exclusions of the underlying policy that they supplement. They can increase an underlying policy’s limits, but they usually aren’t able to fill in coverage gaps that it has. Additionally, because they follow the terms, conditions and exclusions of an underlying policy, excess liability policies usually can’t supplement multiple underlying policies at once. They typically serve as a supplemental policy to just one primary policy.
What Vermont Businesses Can Benefit from Business Umbrella Insurance?
Any Vermont business that wants more coverage than their primary insurance policies provide should consider business umbrella insurance. Some examples of businesses that often benefit from the extra protections that this type of insurance provides include:
- Professionals, who often aren’t able to personally afford the legal costs of defending them in a liability suit
- Businesses that have significant assets, for they could be the target of an opportunistic lawsuit
- Companies that are in high-risk industries, for they’re more likely to be sued
Is Business Umbrella Insurance Expensive?
Commercial umbrella insurance is normally a highly affordable form of insurance. Rates, of course, vary depending on where a business is, what industry it’s in and many other factors. A hair salon in Burlington, VT, for instance, has a different risk exposure than a stone quarry near White River Junction, VT, so the two businesses will likely pay different amounts for a commercial liability policy. In general, however, insurers are able to keep premiums low because these are secondary insurance policies, and they’re therefore less likely than primary policies to have a claim made against them.
How Can Businesses in Vermont Get Business Umbrella Insurance?
When shopping for commercial umbrella policies, it’s important to make sure that all required primary insurance policies and coverages are in place. If a primary policy is required by a commercial umbrella policy but the primary policy isn’t in place, the commercial umbrella policy’s protections may be voided.
For help finding a commercial umbrella insurance policy and making sure all required primary policies are in place, businesses should contact an independent commercial insurance agent who serves Vermont. An independent agent will be able to help businesses both compare commercial umbrella policies and check underlying policies for the necessary coverages.
Most commercial insurance policies provide businesses with robust protections, but even the best policies often have limits on how much coverage they’ll provide. VT businesses that want more protection than their primary insurance policies will afford may find the additional coverage they’re looking for through commercial umbrella insurance.