Most Utah businesses carry general liability, commercial auto, and workers’ compensation insurance. But what happens when a single claim is bigger than the limit on one of those policies? A serious multi-vehicle accident on I-15, a severe injury at a job site, or a large jury award can quickly blow through a $1 million limit. That’s where commercial umbrella insurance comes in.
What Is Commercial Umbrella Insurance?
A commercial umbrella policy provides additional liability limits that sit on top of your existing liability policies. When a covered claim exhausts the limit of an underlying policy, the umbrella pays the rest up to its own limit. Umbrella policies are commonly written in increments of $1 million, and many businesses carry $1 million to $5 million or more depending on their size and risk.
An umbrella typically extends over:
-
General liability for customer injuries and property damage
-
Commercial auto liability for accidents involving company vehicles
-
Employer’s liability, the liability portion of a workers’ compensation policy
Some umbrella policies can also provide coverage for certain claims that the underlying policies don’t cover, after a self-insured retention is met.
Umbrella vs. Excess Liability: What’s the Difference?
The terms are often used interchangeably, but they’re not always the same. An excess liability policy usually follows the exact terms of the underlying policy and only increases the limit. An umbrella policy may be broader, potentially filling certain gaps in your underlying coverage. Your agent can explain which form you have and what it means for your business.
Why Utah Businesses Need Higher Liability Limits
Rising Claim and Verdict Costs
Medical costs, legal fees, and jury awards have climbed steadily across the country. Large verdicts, sometimes called “nuclear verdicts,” are no longer rare, especially in trucking and auto accident cases. A claim that might have settled for a few hundred thousand dollars a decade ago can now be worth far more.
Commercial Vehicles on Busy Utah Roads
Utah’s population growth has brought more traffic to I-15, I-80, Bangerter Highway, and Mountain View Corridor. If your business operates vehicles, a single serious accident involving multiple injured people can exceed a $1 million auto liability limit. Commercial auto is one of the most common reasons businesses add an umbrella.
Contract and Lease Requirements
General contractors, property managers, municipalities, and large commercial clients often require subcontractors and vendors to carry $2 million, $5 million, or more in total liability limits. An umbrella is usually the most affordable way to meet those requirements and stay eligible for larger projects.
Protecting Business and Personal Assets
If a judgment exceeds your insurance, your business assets, future revenue, and in some cases personal assets could be at risk. An umbrella helps protect what you’ve built.
Which Utah Businesses Should Consider an Umbrella?
-
Contractors and construction companies
-
Businesses with company vehicles or delivery drivers
-
Restaurants, bars, and event venues with high foot traffic
-
Property owners and commercial landlords
-
Manufacturers and distributors
-
Businesses that host events or work on client sites
-
Any business with significant assets to protect
How Much Does Commercial Umbrella Insurance Cost?
Umbrella coverage is often one of the most cost-effective policies a business can buy, because it only pays after your primary policies are exhausted. Pricing depends on your industry, number of vehicles, payroll, revenue, claims history, and the limits you choose. A small office-based business may pay relatively little for a $1 million umbrella, while a trucking or construction company will pay more because of its higher exposure.
Keep in mind that umbrella carriers require you to maintain specific minimum limits on your underlying policies, often $1 million per occurrence on general liability and auto. If those underlying limits lapse or drop, you could face a gap in coverage.
How to Choose the Right Umbrella Limit
When deciding on a limit, consider:
-
The contract requirements of your largest clients and projects
-
The number of vehicles and drivers on the road
-
How many customers or members of the public visit your locations
-
The value of your business and assets
-
Your industry’s typical claim severity
Add a Layer of Protection with Bon Insurance Agency
A single large claim shouldn’t be the end of your business. Our team will review your current general liability, commercial auto, and workers’ comp policies, identify your exposure, and help you choose an umbrella limit that fits your risk and your contracts. Contact Bon Insurance Agency today to request a commercial umbrella insurance quote.
