Best Insurance For Commercial Umbrella: Protecting Your Business From Catastrophic Lawsuits

Commercial umbrella insurance (also called umbrella or excess liability for businesses) is a critical layer of protection for U.S. companies exposed to high-severity liability claims. When a single lawsuit or judgment can run into millions—medical costs, catastrophic bodily injury, or large third-party property damage—your primary liability policies (general liability, auto, employer’s liability) can be exhausted quickly. A well-structured commercial umbrella policy protects company assets, future earnings, and reputation.

This guide covers who needs commercial umbrella, how much it costs in major U.S. markets (New York City, Los Angeles, Houston, Chicago, Miami), how to choose providers, and sample pricing from leading insurers.

Table of Contents

Why commercial umbrella matters for businesses

Extends limits above primary liability policies (e.g., general liability, commercial auto).
Covers judgments and settlements that exceed underlying policy limits.
Often broader than underlying policies—may provide coverage for claims not included in the primary policy subject to policy terms.
Affordable relative to risk: adding $1M–$10M of extra limits is typically far less costly than the damages it protects against.

Real-world context: multi-million-dollar jury awards for catastrophic injuries or wrongful death can wipe out small business equity and force bankruptcy without excess protection.

Who should consider a commercial umbrella?

Construction contractors and subcontractors operating in NYC or LA with heavy equipment and on-site risks.
Transportation fleets (trucking, delivery) in hubs like Houston and Chicago.
Landlords and property managers with multiple rental units or tenant exposure.
Hospitality businesses (restaurants, bars) in major metro areas with alcohol liability exposure.
Professional services with client-facing operations where catastrophic bodily-injury exposures exist.

For landlords specifically, see more on targeted coverage in: Best Insurance For Umbrella for Landlords and Rental Property Owners.

Typical limits and how much coverage to buy

Common commercial umbrella limits available:

1M, 2M, 5M, 10M, 20M, and higher for large risks.

How to decide:

Evaluate total net worth (real estate, cash reserves, projected earnings).
Consider the industry’s severity risk (construction and transportation are high).
Review contracts that may require minimum limits (common in construction, leasing, and contracting).

Use decision guides and calculators to choose limits: Best Insurance For Umbrella to Find the Right Limit: Calculators and Decision Guides.

Cost — ballpark premiums and regional examples

Premiums vary by industry, location, loss history, and the quality/limits of underlying insurance. Based on industry data and carrier pricing trends, typical ranges are:

Small/low-risk businesses (professional services, retail): $400–$1,200 per $1 million of umbrella coverage annually.
Moderate-risk businesses (restaurants, landlords, small contractors): $700–$2,500 per $1 million annually.
High-risk operations (heavy construction, trucking fleets, large venues): $2,000–$10,000+ per $1 million depending on exposure and required underlying limits.

Regional examples (illustrative):

New York City (higher jury awards & defense costs): small retailer paying for a $5M umbrella might expect $3,000–$12,000/year.
Los Angeles (similar lawsuit frequency): restaurant with liquor exposure for $5M umbrella: $4,000–$15,000/year.
Houston (large transportation and energy exposures): trucking operator for $10M umbrella: $20,000+/year depending on fleet loss history.
Chicago and Miami fall between the above ranges depending on industry and claims history.

Sources and market references:

Insurance industry pricing guides and market surveys show typical commercial umbrella rates in the ranges above. See general cost references from NAIC and industry resources for context:
- NAIC consumer and business resources: https://content.naic.org/
- Market commentary and rate guidance from brokers and industry portals (see aggregated cost guidance at Insureon and industry articles on umbrella costs): https://www.insureon.com/ and https://www.forbes.com/advisor/insurance/umbrella-insurance-cost/

(Note: actual premiums require insurer quotes — the numbers above are representative ranges derived from market data and carrier pricing trends.)

Major providers and comparative snapshot

Below is a high-level comparison of commonly used commercial umbrella providers in the U.S. and expected starting ranges. Actual pricing is quote-based.

Carrier	Typical Starting Premium per $1M (U.S. average)	Typical Available Limits	Best for
Travelers	$500–$1,500	$1M–$20M+	Nationwide business coverage, good for contractors & general liability-heavy risks
The Hartford	$400–$1,200	$1M–$10M	Small to mid-size businesses, strong small-business servicing
Chubb	$1,200–$5,000+	$5M–$100M+	High-net-worth and large commercial accounts, large-limit excess placements
Liberty Mutual	$600–$2,000	$1M–$50M	Large commercial accounts, national underwriting presence
Travelers / Nationwide / CNA (market examples)	$500–$2,000	$1M–$50M	Broad agent networks and bundling options

These ranges are illustrative — carriers like Chubb and specialty markets will price higher for broader coverage and high limits. For deeper carrier-by-carrier comparisons and claim handling practices, see: Best Insurance For Umbrella Providers: Comparing Limits, Costs and Claim Handling.

Underlying requirements and stacking over policies

Most umbrella policies require specific minimum underlying limits on:

Commercial General Liability (CGL)
Commercial Auto Liability
Employers’ Liability (Workers’ compensation may have retention rules)
Other specialty policies depending on operation

If underlying policies have lower limits than required, you’ll either need to increase those primary limits or buy a gap/side-A coverage endorsement. For guidance on when to buy umbrella versus simply increasing underlying limits, see: Best Insurance For Excess Liability: When to Buy an Umbrella vs Increasing Underlying Limits.

Claims, exclusions, and policy nuances

Umbrella policies typically follow the form of the underlying policy: they cover what the underlying policy covers and provide excess limits—however, many include broader insuring agreements.
Exclusions: intentional acts, professional liability (E&O) unless endorsed, pollution (unless specifically added), and certain contractual liabilities may be excluded.
Defense costs: some umbrellas pay defense within the limit; others pay outside the limit—this materially affects the policy’s usefulness.

Work closely with your broker to confirm:

What is “follow form” vs “broader coverage” language?
Where defense costs are paid (inside or outside the limit)?
Any required endorsements (e.g., liquor liability follow-form).

Steps to buy the right commercial umbrella in your city (NYC, LA, Houston, Chicago, Miami)

Inventory your assets and contractual exposures.
Review existing primary policy limits and endorsements.
Request tailored quotes from 2–3 carriers (use independent brokers for market access).
Compare price, underlying requirements, defense cost handling, and exclusions.
Negotiate underlying limits if the carrier requires higher minima.
Purchase and confirm certificates naming additional insureds per contract requirements.

Final recommendations

Most medium-sized businesses in high-exposure cities should strongly consider at least $5M–$10M in umbrella/excess limits.
For high-risk industries or companies with substantial real estate or fleets in NY, LA, Chicago, Houston, or Miami, $10M+ is often warranted.
Get a broker or wholesale broker involved for limits above $10M to access specialty markets (Chubb, AIG, Lloyd’s placements).