Do I Need Commercial Umbrella Insurance?
A business may need umbrella limits if contracts require them or a large claim could exceed its primary policies.
It only applies to scheduled coverage and has its own exclusions and attachment requirements. California’s guide describes it as protection against liability above basic policy limits. This is a planning question, not a universal requirement for every business.
The extra limit is useful only if the umbrella covers the relevant exposure and the underlying coverage meets its attachment requirements. If the auto, general liability, or employers’ liability policy has different terms, an umbrella may not fill the gap as expected. A self-insured retention can apply to some claims.
Compare your contracts and risk exposures with the umbrella schedule, attachment points, aggregate limits, exclusions, and retention. Ask the broker to identify any business policies that are missing from the schedule before deciding on a limit.
