Commercial Umbrella Insurance in Vermont

What is Commercial Umbrella Insurance?

Businesses can obtain significant amounts of coverage through primary insurance policies, but there is often a limit to how much protection these policies will provide. Commercial umbrella insurance policies give Vermont businesses that want additional coverage a way to get the extra protection they desire.

Commercial umbrella insurance policies normally serve as secondary policies, supplementing primary policies. The primary policies that are supplemented are sometimes called “underlying policies.”

What Vermont Businesses is Business Umbrella Insurance Right For?

A business umbrella insurance policy might be appropriate for any Vermont business that wants more protection than their primary insurance policies offer. Businesses with lots of assets, businesses in high-risk industries and businesses that just want extra safeguards in place may want to explore getting a business umbrella policy.

In addition to for-profit businesses, many municipal governments and not-for-profit organizations can also benefit from having extra insurance coverage. In many cases, governments and nonprofits are exposed to a lot of risk and have few resources to address a potential liability suit with.

How Does Business Umbrella Insurance Differ from Excess Liability Insurance?

Although they’re both forms of secondary commercial insurance, business umbrella and excess liability insurance aren’t identical. Business umbrella policies often come with their own terms, conditions and exclusions, while excess liability policies generally copy the language of an underlying policy verbatim.

This difference has practical implications for how the two forms of insurance work. Business umbrella policies are frequently able to supplement several policies and they might also fill in underlying policies’ gaps. Excess liability policies tend to supplement just one policy and typically can’t fill in coverage gaps left by underlying policies.

Is Business Umbrella Insurance Expensive?

While policies’ premiums can vary, most business umbrella insurance policies are highly affordable. Because they’re secondary policies, they can provide high limits yet keep premiums low. It’s not uncommon for policies to have limits in the millions and premiums that even small businesses can afford.

What Are Underlying Limits and Self-Insured Retentions?

Many commercial umbrella policies have underlying limits and self-insured retentions. These aren’t exactly the same, but they’re similar. Both end up working similar to a deductible, ensuring that the first portion of a claim is paid by a means other than the secondary umbrella policy.

Underlying limits are normally minimum coverage requirements that primary (underlying) policies must meet. When an umbrella policy’s coverage has an underlying limit, it typically ensures that the first part of a covered claim will be paid by the primary policy.

Self-insured retentions work on the same premise, but the underlying protection is provided by the business rather than a primary policy. These are usually used when an umbrella policy is filling in a coverage gap left by primary policies.

In either case, an umbrella policy’s protections may be voided if the policy’s underlying limits or self-insured retentions aren’t met. Thus, it’s particularly important to confirm that all necessary underlying protections are in place when purchasing a commercial umbrella policy.

How Can Businesses in Vermont Get Commercial Umbrella Insurance?

Because commercial umbrella insurance policies interact with underlying policies and self-insured retentions, this isn’t an insurance that businesses should purchase on their own. Instead, Vermont businesses should ask an independent insurance agent who’s familiar with secondary commercial insurance for assistance. An independent agent can compare all insurers’ policies, and an agent who’s helped other businesses with this type of insurance will know how to check underlying limits and self-insured retentions.