Most business members of The Builders Institute (BI)/Building and Realty Institute (BRI) either have, or should have, an Umbrella Liability insurance policy to protect their respective businesses.
That said, we know from the questions that we often get at Levitt-Fuirst Associates that the Umbrella policy is one of the most misunderstood of all the commercial insurance policies available to businesses.
Business owners understand – the “Property” insurance policy protects property (surprise!), such as buildings, office furniture, and inventory, from damage (e.g., due to fire, storms, etc.).
The “General Liability” policy protects the business from legal liability (surprise again!) from lawsuits (e.g., from a slip-and-fall occurring at the business). The “Commercial Auto” policy responds to claims involving automobiles (another shocking surprise!), such as damage to a vehicle or legal liability (e.g., due to a collision with another vehicle).
But, the purpose of the “Umbrella” policy is not as intuitive, based just on the name. After all, we know that an Umbrella Liability policy does not protect us against Umbrellas! The name “Umbrella” implies that the policy “covers” over everything, which leads many to an incorrect perception, and questions such as: “If there isn’t enough money from my Property insurance to rebuild my apartment building after a fire, then won’t my Umbrella policy make-up the difference?”
Or, “If I don’t have a Pollution Liability policy, will my Umbrella policy respond to a fuel oil tank leak?”