Extend your liability protection beyond primary policy limits. Umbrella insurance provides an additional layer of security when claims exceed your underlying coverage, protecting your business assets from catastrophic losses.
Umbrella insurance sits above your primary liability policies (GL, auto, employers liability). It only pays after those underlying policies are exhausted. Think of it as a second layer of protection.
When a claim exceeds your primary policy limits, the umbrella policy picks up where the underlying coverage stops. For example, if you have $1M in GL and face a $2M claim, umbrella covers the excess $1M.
Umbrella policies require you to maintain minimum limits on underlying policies (typically $1M GL, $1M auto). If underlying limits are inadequate, umbrella coverage may not respond as expected.
Some umbrella policies also provide broader coverage—protecting against certain claims that underlying policies exclude. This "drop-down" coverage varies by policy and insurer.
Umbrella policies are relatively affordable because they rarely pay claims—most claims settle within primary limits. But when they do pay, the protection is invaluable.
Washington State does not require umbrella insurance, but contract requirements and prudent risk management make it essential for many businesses.
Commercial contracts in Washington frequently require $2M, $5M, or even $10M in liability limits. Umbrella insurance is the most cost-effective way to meet these requirements.
Government contracts and public works projects in Washington often specify liability limits that exceed standard policy maximums. Umbrella coverage makes bidding on these projects possible.
Washington courts can award significant damages in liability cases. Umbrella insurance protects business owners' personal assets when business entity protection is insufficient.
Commercial landlords and property management companies in Washington often require tenants to carry umbrella coverage, especially for businesses with higher risk profiles.
Underlying policy limits—higher primary limits typically mean better umbrella rates
Industry and risk classification—higher-risk businesses face higher umbrella rates
Claims history—prior large claims affect umbrella availability and terms
Coverage limits needed—$1M umbrella differs significantly from $10M
Number of underlying policies—more policies to cover may affect terms
Business operations scope—geographic reach and complexity matter
Asset exposure—businesses with more to protect may need more coverage
Get a personalized quote to see exactly what umbrella costs for your business.
Get Your QuoteSee how umbrella protects Washington businesses in actual claim scenarios.
A company delivery truck causes a multi-vehicle accident on I-5 near Seattle. Multiple injuries result in claims totaling $3.5 million. The commercial auto policy has $1 million limits.
After the auto policy pays its $1M limit, the umbrella policy covers the remaining $2.5 million in claims and defense costs. Without umbrella coverage, the business owner would face personal liability for the excess.
A customer suffers a severe spinal injury at a Spokane retail store. Medical costs, lost wages, and pain and suffering damages total $2.8 million. The store's general liability policy has $1 million per occurrence.
The GL policy pays $1 million, and the umbrella policy covers the remaining $1.8 million. The business continues operating without facing bankruptcy from a single catastrophic claim.
A contractor's work on a commercial building results in water intrusion affecting multiple floors. Repair costs and business interruption claims from tenants total $4 million. GL limits are $2 million.
After the GL policy pays its $2M limit, the umbrella responds for the additional $2 million. The contractor's business and personal assets remain protected from this major claim.
Consider your total asset exposure (business and personal if not fully protected by corporate structure), your contract requirements, and your risk profile. Many small businesses start with $1-2 million in umbrella coverage. Contractors, businesses with significant assets, or those with large contracts often need $5-10 million or more. Your insurance advisor can help determine appropriate limits based on your specific situation.
Most umbrella insurers require you to maintain specific minimum limits on underlying policies. Common requirements include $1 million per occurrence general liability, $1 million combined single limit on commercial auto, and employers liability of $500K/$500K/$500K. If your underlying limits are lower than required, you may need to increase them before obtaining umbrella coverage.
They're similar but not identical. Excess liability follows the exact terms of underlying policies—it only covers what the underlying policy covers, just at higher limits. Umbrella insurance may provide broader coverage, picking up certain claims that underlying policies exclude. In practice, many commercial umbrella policies function similarly to excess policies, but check your specific policy terms.
Generally no. Commercial umbrella policies typically exclude professional liability (E&O) claims. If you need higher limits for professional liability, you'll need a separate excess professional liability policy. Similarly, D&O, cyber, and employment practices typically require their own excess coverage rather than being covered by a standard umbrella.
This varies by policy. Some umbrella policies provide defense costs in addition to policy limits, while others include defense costs within limits. Once underlying policies are exhausted, the umbrella typically takes over defense. Understanding how your policy handles defense costs is important—defense for complex litigation can cost hundreds of thousands of dollars.
Most umbrella insurers require you to have commercial auto coverage if you use vehicles for business. However, if your business truly has no auto exposure (no owned vehicles, no employees driving for work), some insurers may write umbrella over just your general liability. Non-owned and hired auto coverage may be required if employees ever use personal vehicles for business purposes.
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