A business Umbrella policy is a contract that offers coverages for liability claims above and beyond limits paid by certain underlining liability policies provided by the business. The policy goes in effect when the other underlining liability coverages stop. The named insured in the Umbrella policy is accountable for keeping in force certain scheduled underlining policies. Any adjustments in the status, terms, and conditions of the underlining policies must be reported to the insurance provider offering the Umbrella coverage.

Limits of Umbrella Coverage: The Umbrella insurance policy comes with limits of $1, $2, $3, $4, and $5 millions. Many companies may not provide in excess of $5 millions. Nevertheless, a number of insurers may offer higher underlining limit levels.

Umbrella Vs Excess Liability Insurance: Although used interchangeably, insurance professionals believe that there is a significant difference between Excess liability policies and Umbrella policies. In most instances policies labeled ‘Excess Liability Insurance’ offer only extension of the same coverages provided by the underlining policies, while Umbrella policies will fill some gaps by giving coverages for losses that are not insured by the underlining policies.

SIR: Self Insured Retention, is the amount which the insured person has to pay before the Umbrella policy kicks in for certain losses that do not have coverage under any underlining policy. For example, if your SIR is $10,000 then your Umbrella policy will pay for certain liability losses that are not covered under the underlining policies, above and beyond that amount. SIR can be removed by endorsement but at additional prices.

Umbrella Underlining Insurance Policies. The following is a list of the underlining policies for Umbrella insurance policies.

* Commercial General Liability. The types, forms, and limits of coverage are crucial factors that differentiate one policy from another one.

* Business Auto Liability Types and Limits. Besides the limits of coverage, special attention is to be paid to the traits of operators, their ages and driving record backgrounds. Also, truck make and models and radius of operations, FHWA filing requirements can become very important in determining the rates.

* Commercially Owned Watercraft. The forms and limits of the watercraft policy along with people involved in using the watercraft.

* Workers Compensation &and Employers Liability. Limits of liability and state exposure are critical factors that will affect the price of Umbrella policy.

* Professional Liability Forms, Types and Limits

* Liquor Liability Limits

Issues Influencing Rates and Underwriting of Umbrella Insurance

Description of Operations: Umbrella insurance rates vary based on several factors, first of which is description of operations. No two Umbrella policies have the same rate, due to the fact that different businesses have varying risk levels. Other factors lead to increased risk, hence premiums, of the Umbrella insurance. These factors include exposures to habitation, exposure to swimming pools, athletic and sport amenities, as well as exposure to consumption of liquor and live entertainment.

When there is habitation exposure, a complete description of that exposure becomes important such as the number of units; construction type, age and number of stories of the building; nature and rates of occupancy, etc.

In situations where liquor is consumed, insurance companies normally worry about the size of operation, live entertainment available, basic safety and security offered. Offering and sponsoring sport events such as swimming or gymnastics may mandate that the business furnishes to the insurance companies details about the nature of facilities/ activities, security measures, and other risk management measures.

Searching for an Umbrella policy can be a simple task. Contacting an independent insurance agent is a good start. Independent insurance agents have access to many insurers and can provide more quality quotes at reasonable prices.