Commercial Umbrella Insurance in Texas
When a serious liability claim exceeds the limits of your underlying business insurance, commercial umbrella insurance may provide an additional layer of liability protection.
- ✓ Independent agency
- ✓ Multiple commercial carriers
- ✓ Serving businesses across Texas
What Is Commercial Umbrella Insurance?
Commercial umbrella insurance is designed to provide additional liability limits above certain underlying commercial insurance policies.
Your business may already carry general liability, commercial auto or employer’s liability coverage. Those policies provide the primary layer of protection.
When an eligible covered claim exceeds the applicable underlying limit, a commercial umbrella policy may provide additional coverage up to its own limit.
Depending on the policy structure, umbrella coverage may also address certain liability exposures not covered by an underlying policy, subject to a self-insured retention.
What Does Commercial Umbrella Insurance Do?
An umbrella policy typically sits above several underlying liability policies at once.
Above General Liability
Commercial umbrella coverage may sit above your general liability policy, depending on carrier requirements and policy structure.
Above Commercial Auto
Depending on the policy, umbrella insurance may provide excess liability protection above qualifying commercial auto coverage.
Above Employer’s Liability
Many umbrellas also sit above the employer’s liability portion of a workers’ compensation policy.
Why Might a Business Need an Umbrella Policy?
A single serious liability claim can exceed the limits available under a primary business insurance policy.
Customer Injuries
A customer or visitor suffers a serious injury connected with your premises or business operations.
Property Damage
Business operations, products or completed work result in covered damage to someone else’s property.
Commercial Vehicle Accidents
A serious covered accident involving a business vehicle creates liability greater than the auto policy’s limit.
Completed Operations
A liability claim arises after work has been completed, subject to the underlying and umbrella policy terms.
Contract Requirements
A customer, landlord or general contractor requires higher liability limits as a condition of doing business.
Large Liability Claims
One serious claim may involve damages and defense costs that exceed a primary policy’s limit.
How Umbrella Coverage Works With Underlying Policies
An umbrella generally supplements primary insurance rather than replacing it. Carriers usually require minimum underlying limits.
| Underlying Coverage | How It May Relate to an Umbrella Policy |
|---|---|
| Commercial General Liability | Primary coverage for eligible bodily injury, property damage and personal and advertising injury claims. An umbrella may add limits above it. |
| Commercial Auto Liability | Primary liability protection for eligible vehicle exposures. An umbrella may add limits above qualifying auto coverage. |
| Employer’s Liability | The liability portion of a workers’ compensation policy. Many umbrella programs schedule it as an underlying policy. |
| Other Liability Policies | Depending on the carrier, additional liability policies may be scheduled or required as part of the umbrella program. |
Commercial Umbrella vs. Excess Liability
The terms are often used together, but they are not always the same thing.
Commercial Umbrella
- Adds limits above several underlying policies
- May cover some claims the underlying policies don’t, after a self-insured retention
- Has its own terms, which can be broader or narrower than the underlying policies
Excess Liability
- Adds limits above a specific underlying policy or tower
- Often “follows form,” matching the underlying policy’s terms
- Commonly used to build higher limits in layers
Who Should Consider Commercial Umbrella Insurance?
Appropriate limits depend on your operations, contracts, assets, vehicles, customers and other exposures.
Contractors
Contractors may face liability exposures from job sites, completed operations, customer property and commercial vehicles.
Businesses With Vehicles
Companies operating commercial vehicles or trucks may want to evaluate whether their auto liability limits are enough.
Customer-Facing Businesses
Retail, restaurant, office and other businesses with frequent visitors may have meaningful premises liability exposures.
Businesses With Employees
As operations grow, liability limits should be reviewed along with locations, payroll and business activities.
Businesses With Contracts
Certain contracts require liability limits higher than those carried on primary policies.
Growing Texas Businesses
As a business expands, the liability limits that once made sense may need to be reevaluated.
How Lavon Insurance Helps
Every business has a different risk profile. We start by understanding your existing insurance and the liability exposures you face.
Review Your Current Policies
We review your underlying liability coverage and current limits before discussing additional coverage.
Understand Your Exposures
We consider operations, vehicles, locations, customers, employees and contract insurance requirements.
Explore Available Options
As an independent agency, we compare umbrella and excess options from carriers available to your business.
Commercial Umbrella Insurance FAQs
What is commercial umbrella insurance?
Commercial umbrella insurance is liability coverage that may provide additional limits above certain underlying commercial liability policies. Coverage varies by policy.
Is commercial umbrella the same as excess liability insurance?
The terms are sometimes used together, but policy structures can differ. A commercial umbrella generally provides additional limits above several underlying policies and may provide broader coverage, while excess liability often follows the form of a specific underlying policy.
Does commercial umbrella insurance replace general liability?
Generally, no. Commercial umbrella coverage is designed to work with qualifying underlying liability insurance rather than replace it, and carriers typically require minimum underlying limits.
What does a commercial umbrella policy cover?
Coverage depends on the policy. An umbrella may provide additional liability limits above certain underlying policies and may address certain exposures not covered by the underlying policy, subject to its terms, conditions, limits and exclusions.
How much commercial umbrella insurance does a business need?
There is no single appropriate limit for every business. Consider your operations, contracts, vehicles, assets, customers, underlying limits and overall risk profile.
Can small businesses get commercial umbrella insurance?
Many small businesses can qualify for commercial umbrella or excess liability coverage. Eligibility, required underlying limits and available limits vary by carrier and business.
Does a personal umbrella cover my business?
Generally, no. A personal umbrella is designed for personal and household liability and typically excludes business activities. Businesses usually need a commercial umbrella.
Build a Broader Business Insurance Program
An umbrella is only as strong as the policies underneath it.
General Liability
Primary liability coverage for many common business exposures.
Learn more →Commercial Auto
Coverage for eligible vehicles used in business operations.
Learn more →Workers’ Compensation
Coverage for employee injuries, including employer’s liability.
Learn more →Professional Liability
Coverage for certain claims arising from professional services, errors or omissions.
Learn more →Cyber Insurance
Coverage designed for certain cyber-related risks and incidents.
Learn more →Employment Practices Liability
Coverage options for certain employee claims, often excluded from umbrellas.
Learn more →Does Your Business Need Higher Liability Limits?
Let Lavon Insurance review your existing business insurance, underlying limits and exposures to help you explore commercial umbrella options.
Coverage, eligibility, limits, exclusions, underlying insurance requirements and availability vary by carrier and policy. This page is for general informational purposes and does not modify or replace the terms of an insurance policy.