Commercial Umbrella or Excess Liability Insurance

Ontario Excess Liability Insurance or Commercial Umbrella Insurance  

Business insurance is complex, and one of the most challenging parts is also one of the most necessary: understanding how much liability coverage you need and ensuring that you have it in the right amounts and on the right policies. This is why experienced commercial insurance brokers, such as the experts at Morison Insurance, recommend that business owners have Ontario Excess Liability insurance or Commercial Umbrella Liability insurance.  

Both Excess Liability insurance and Commercial Umbrella Liability insurance give you the peace of mind that comes with knowing you are covered with the protection you need to avoid paying out of pocket should your company be sued. Even in more extreme situations where the cost of your legal defence and court-ordered settlements could far exceed the typical expense. Speak to your knowledgeable Morison Insurance Broker today to learn about these crucial liability coverages and how they can benefit your commercial business.  

What Are Commercial Umbrella and Excess Liability Insurance?  

Commercial Umbrella Liability or Excess Liability insurance increases a company’s liability limit on multiple policies or one specific business insurance policy. It complements existing Commercial General Liability insurance coverage by providing an extra layer of protection on top of the original or underlying policy or policies.  

A Commercial Umbrella Liability or Excess Liability insurance policy responds to eligible losses after the primary or underlying liability insurance limit is reached. In the event of a loss, the liability portion of the underlying policy is the first to respond. For example, your business has a Commercial General Liability policy with a coverage limit of $2 million. You are sued because you or your employee allegedly caused third-party bodily injury or third-party property damage, and the court finds you liable, ordering you to pay a large settlement. Your Commercial General Liability insurance policy pays the first $2 million in insurance compensation, but if your legal defence and settlement costs push the settlement to $2.8 million in total, an Excess Liability insurance policy with a coverage limit of $1 million can step in to cover the $800,000.  As a result, you do not have to pay out of pocket for litigation and settlement expenses.  

What Is the Difference Between Ontario Excess Liability Insurance and Commercial Umbrella Liability Insurance?  

It’s not uncommon for people to assume that Excess Liability insurance and Commercial Umbrella Liability insurance are just two insurance terms for the same type of coverage. Still, even though they are very similar, they aren’t the same.  

An Excess Liability insurance policy covers you for increased liability limits for a specific insurance policy, and it pays out insurance compensation based on the same terms as the original or underlying policy. That means if a peril is excluded from the underlying policy, it’s also excluded from the Ontario Excess Liability insurance coverage. The Excess Liability coverage adheres to the terms of the underlying policy. It provides additional coverage that can be accessed once the coverage limits on the underlying policy are exhausted.  

A Commercial Umbrella Liability insurance policy adds to the liability limit of the underlying liability policies to offer additional protection. A Commercial Umbrella Liability insurance policy provides additional coverage that can be accessed after the coverage limit of the underlying policy or policies is exhausted. A Commercial Umbrella Liability policy will also cover over an underlying Commercial Automobile Policy, such as a Fleet.  

Who Needs to Have Commercial Umbrella or Excess Liability Insurance?  

Most businesses can benefit from the added security of the right Commercial Umbrella Liability or Excess Liability insurance. It is even more essential for businesses with higher levels of exposure to liability-related incidents that could result in litigation and costly settlements. Businesses that are more vulnerable to allegedly causing injury, property damage, or personal harm to a third party need more liability coverage, such as a food and beverage manufacturer who could be sued because their product contained an allergen that wasn’t correctly listed on the label. Those who work in hospitality, construction and manufacturing businesses or provide professional services of any type should consider Ontario Excess Liability insurance or Commercial Umbrella Liability insurance.  

We live in a litigious society, and every business, regardless of the type, has the potential to have legal action brought against them in court. Legal defence costs and settlement expenses can easily exceed a million dollars and continue to climb from there, and it’s not at all uncommon for business owners to find themselves struggling to find the funds to cover costs that exceed the coverage limits on standard liability policies. Why put yourself through that stress and uncertainty of that financial impact when you can cover your coverage gaps with the right Ontario Excess Liability insurance or Commercial Umbrella Liability insurance?  

What Is Covered By Excess Liability Insurance and Commercial Umbrella Insurance?  

Excess Liability insurance applies to the perils and situations covered by the existing underlying insurance policy. That means the Ontario Excess Liability insurance will follow the original primary insurance policy.  

When it comes to Commercial Umbrella Liability insurance works a bit differently. Commercial Umbrella Liability policies can offer an additional layer of coverage that can differ from the terms of the primary liability insurance policy. Commercial Umbrella Liability insurance is designed to address liability coverage gaps on a wide range of policy types. Examples of these additional coverages include:  

• Coverage for allegations of slander, libel and defamation of character  
• Extending coverage worldwide
• Policyholder’s legal defence for charges that are groundless, false or fraudulent  

What Is Not Covered By Commercial Umbrella or Excess Liability Insurance?  

It is important to remember that the extra layer of protection offered by these insurance products only applies to liability-related costs such as legal defence, court fees, attorney fees and legal settlements. Because they are only for expenses associated with liability, they cannot be added to policies that are not for liability insurance and cannot be applied to costs that don’t involve a lawsuit.  

For example, if your commercial property suffers a destructive event such as a fire and your commercial property insurance coverage limits aren’t high enough to provide you with all the compensation you need to restore the building and replace all the contents within. You cannot get additional coverage from a Commercial Umbrella Liability or Excess Liability insurance policy for this type of loss because it is a property insurance claim, not a liability insurance claim.  

Is Excess Liability Insurance or Commercial Umbrella Liability Insurance the Better Choice?  

The best type of liability coverage for your particular circumstance hinges on a wide range of factors. The right option for you is the one that closes up gaps in your existing commercial liability coverage. This is why it’s essential to understand what exactly is covered by your insurance policies, what the coverage limits are, and where those policies could potentially fall short of offering you the full financial protection you need if you encounter litigation. Rely on your Morison Insurance Broker to help you navigate your insurance requirements and find the right coverages so you can rest assured you have the extra protection you need for all the perils you are most likely to encounter throughout your business operations.  

Why Can’t Excess Liability Insurance or Commercial Umbrella Liability Insurance Be Used Before My Regular Policy is Exhausted?  

Commercial Umbrella Liability and Excess Liability insurance are designed to be used only when the primary coverage has reached its limit. You must first file a claim on your primary insurance coverage and receive all possible compensation you are entitled to under that policy before you can move on to your Excess Liability or Commercial Umbrella Liability insurance and access insurance compensation under your extra layer of insurance protection.  

How Much Commercial Umbrella or Excess Liability Insurance Is Recommended?  

The answer to this question varies widely based on a vast array of factors, which is why there’s a significant advantage to having a qualified, knowledgeable insurance broker on your side. Your Morison Insurance Broker will help you assess your needs for Excess Liability or Commercial Umbrella Liability insurance which could include such information as the risk levels your business is exposed to for various types of liability, and how financial losses could impact you and your business, to name a few. With the necessary information, we can make an informed assessment and recommendation on the amount of Commercial Umbrella Liability or Excess Liability insurance coverage you should consider.  

How Are Premiums Calculated for Ontario Excess Liability Insurance and Commercial Umbrella Liability Insurance?  

Like any type of insurance, premiums are calculated based on several important factors. Some of the considerations that go into valuations for Ontario Excess Liability insurance and Commercial Umbrella Liability insurance are:  

• The type of insurance policy that is being added to  
• Your current policy’s liability coverage limits  
• The type of business and industry  
• The location of the business  
• How many people are employed  
• Annual revenue and projected revenue  

Where Can I Get Ontario Excess Liability Insurance or Commercial Umbrella Liability Insurance?  

If you’re considering Commercial Umbrella Liability insurance or Excess Liability insurance, or you’re not sure that you currently have enough in place to address the coverage gaps on your liability insurance policies, give us a call at 1-800-463-8074 to speak with a licensed Broker at Morison Insurance and find out more. Our reliable insurance Brokers have the skill and experience to track down the coverage you need in the right amount so you can have total peace of mind knowing you’ve got the additional layer of liability protection you need to avoid financial losses.