If there’s a claim against your business, the last thing you want is to come up short on insurance coverage. Additional policies can provide extra protection, but how do you know which kind is right for your business? Here are the basics of excess liability vs umbrella coverages.
Excess Liability Policies: Extra Money
An excess liability policy depends on your underlying, or primary, liability insurance for most terms and exclusions. If a claim is covered under your primary policy, excess liability coverage provides additional money beyond the primary policy’s limits. If a claim is not covered by your underlying policy, then it’s not covered by excess liability.
You may need excess liability insurance if you need to increase your coverage limits (without adding additional types of coverage).
Umbrella Policies: Extra Money Plus Additional Coverage
An umbrella policy increases your liability limits, just like an excess liability policy. However, an umbrella policy also provides liability coverage for events that are not covered by your primary policy. Unlike excess liability policies, an umbrella policy has its own terms and exclusions, outside of your underlying coverage.
You may need umbrella insurance if you need to increase your coverage limits and if you need coverage for events that are not covered by your primary policy.
Your insurance needs may change as your business grows. Supplemental policies are a great way to ensure that your business is protected.