Commercial umbrella insurance cost

Small businesses pay an average premium of $75 per month, or about $900 annually, for commercial umbrella insurance.

Our figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance companies. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.

Commercial umbrella insurance boosts liability coverage when you reach the maximum policy limit on your underlying general liability insurance, commercial auto insurance, or employer's liability insurance. Most small businesses purchase this extra coverage as a way to meet a client's demands for limits in excess of $2 million.

While Insureon's small business customers pay an average of $75 monthly for commercial umbrella insurance, 29% pay less than $50 per month and 32% pay between $50 and $100 per month.

The cost varies for small businesses depending on their risks and the amount of coverage they choose.

The cost of umbrella insurance increases with the amount of insurance coverage. In short, you'll pay more for higher liability limits.

Generally, it costs about $40 per month for each $1 million of additional coverage you buy. For example, raising the limits on your general liability insurance from $2 million to $5 million might cost an additional $120 per month over the cost of the underlying policy.

Commercial umbrella insurance boosts your limits across several liability policies. If you only need coverage added to one liability insurance policy, then you could purchase excess liability insurance.

To select the most cost-effective policy for your business, take stock of the potential liabilities you face and see if your business needs the extra protection that commercial umbrella insurance provides.

Our analysis of commercial umbrella insurance providers reveals that for small businesses, your industry has the biggest impact on your premium. Businesses in industries that are vulnerable to costly lawsuits may need higher limits than those with limited liability, and will pay a higher premium for umbrella insurance.

For example, building design professionals pay an average of $112 monthly for umbrella coverage, while nonprofits pay an average of only $43 per month. The graph below illustrates how the type of business affects what you'll pay for a commercial umbrella insurance policy.

Depending on the industry that you work in, such as construction or cannabis, you may be required by your state to carry general liability insurance. For other businesses, such as those in real estate, insurance, or healthcare, you may need professional liability insurance (also called errors and omissions insurance) before you can get a license.

You can only buy an umbrella policy for general liability, commercial auto, and employer’s liability policies. You must first buy one or more of these policies before you can buy umbrella coverage for each one.

Other business insurance coverages, such as workers’ compensation, cyber insurance, and commercial property insurance, are excluded from umbrella coverage.

Commercial umbrella insurance increases the coverage limits of your underlying insurance policies in $1 million increments. It's fairly common for a client's contract to call for a $5 million limit on a policy. In that case, an umbrella policy with a limit of $3 million would be added to a business liability policy with a $2 million limit to reach the total requested amount.

It's important to make sure you're fully protected against the high costs of a lawsuit. At any business, a visitor could trip and suffer an injury. The resulting legal and medical expenses might escalate to the point where they could sink your business.

Even if no one outside your company visits your office, someone could still hold your business liable for damages. For example, businesses that run advertising campaigns or post on social media could face a lawsuit if they post content that doesn't belong to them, or make a false claim about a competitor.

When someone sues your business – even if it's a frivolous lawsuit – you'll have to pay legal defense costs, such as the cost of hiring an attorney. If you lose the suit, you could end up paying a fortune in a court-ordered judgment or a settlement.

Umbrella insurance kicks in when your underlying policy reaches its limit, which could save your business from a devastating loss. Because the premium is based upon your level of risk and how much coverage you buy, small businesses like LLCs and sole proprietorships often pay only a small monthly premium for this coverage.

Pay your entire premium upfront. You can typically pay your premium in monthly or annual installments. It might be tempting to go with a smaller monthly payment, but consider paying the full premium instead. Many insurers offer discounts on annual premiums.

Proactively manage your risks. Umbrella insurance covers your liability risks across several policies, and fewer claims means lower insurance rates. Business owners can create a comprehensive risk management plan to avoid claims. For example, you might:

• Develop a thorough training program for employees
• Invest in a security system
• Compile rules for posting to social media
• Create procedure checklists and reviews
• Minimize hazards on your business premises
• Limit who can drive business vehicles to avoid claims on your auto insurance policy

Insureon is the #1 independent agency for online delivery of small business insurance. We help business owners compare quotes from top-rated providers, buy policies, and manage coverage online.

By completing Insureon’s easy online application today, you can get free quotes for commercial umbrella insurance and other policies from top-rated U.S. insurance companies. You can also consult with an insurance agent on your business insurance needs.

Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.

Insurance premiums vary based on the types of policies a business buys. See our small business insurance cost overview, or explore costs for a specific business insurance policy.