An umbrella policy provides additional limits of coverage in increments of $1,000,000 in addition to the underlying limits of General Liability, Business Auto, and the Employers Liability portion of a Workers’ Compensation policy.
For example, if you have an Umbrella Liability policy with a limit of $4,000,000 and a General Liability policy with a limit of $1,000,000, you have $5,000,000 of total limits of General Liability protection.
It is important to note that Umbrella Liability policies do not coordinate with and provide additional limits of protection over a Professional Liability policy. Therefore, if you want a higher Professional Liability limit than $1,000,000, you must buy this separate from the Umbrella Liability.
Why would a tech company want to buy an Umbrella Liability policy?
- If it is required by contract to protect a customer or another tech company that you are performing work on behalf of.
- You want the additional “peace of mind” for a relatively inexpensive price. The average premium for each $1,000,000 of incremental coverage is approximately $425.
