Commercial umbrella insurance is also known as “excess liability” insurance. It is a secondary policy that covers a wide variety of contingencies. The purpose of an umbrella policy is to provide extra liability coverage on your primary policy. It comes into effect when the limits of your underlying insurance are exceeded. In other words, if you have coverage of $500,000 on your general liability policy, but you have a claim of $1,000,000, then your umbrella policy will cover the extra $500,000. In addition to extra coverage limits, umbrella insurance will probably also insure you against a variety of things that your general liability policy does not.
Commercial umbrella plans are generally very thorough in the types of claims they cover. A good commercial umbrella plan will typically cover things like the following: personal injury; contractual liability for both written and oral agreements; non-owned aircraft liability; watercraft liability; liquor law liability; and extension of coverage to other insured parties, such as business partners or employees. Coverage will of course vary by provider, so ask your insurance agent for a rundown of what your particular umbrella plan covers.