What is the difference between commercial umbrella and commercial excess insurance?

Commercial umbrella insurance and commercial excess insurance are both types of liability insurance that provide additional coverage beyond the limits of a business’s primary liability policies.

However, there are some key differences between the two:

1. Coverage Trigger:

   • Commercial Umbrella Insurance: This type of insurance typically provides broader coverage and can respond to various underlying liability policies, including general liability, auto liability, and employers’ liability. It may also cover some exposures not covered by underlying policies.
   • Commercial Excess Insurance: Commercial excess insurance, on the other hand, primarily serves as a simple extension of the limits of an existing policy, such as a general liability policy. It provides additional coverage but doesn’t expand the scope of coverage as much as umbrella insurance.
     
     

2. Scope of Coverage:

   • Commercial Umbrella Insurance: Umbrella policies often offer more extensive coverage. They can cover liabilities not included in underlying policies and may have fewer exclusions.
   • Commercial Excess Insurance: Excess insurance only increases the limits of an existing policy without changing the terms or conditions. It doesn’t typically provide broader protection.
     
     

3. Self-Contained Policy:

   • Commercial Umbrella Insurance: Umbrella insurance can be a self-contained policy with its own terms, conditions, and insuring agreements. It can also include a self-insured retention (SIR) amount, which is similar to a deductible.
   • Commercial Excess Insurance: Excess insurance is usually tied to the terms and conditions of the underlying policy, and it doesn’t introduce new clauses or conditions.
     
     

4. Cost:

   • Commercial Umbrella Insurance: Umbrella insurance tends to be more expensive than excess insurance because it offers broader coverage.
   • Commercial Excess Insurance: Excess insurance is typically more affordable because it merely extends the limits of an existing policy.
     
     

In summary, commercial umbrella insurance is a broader and more flexible form of coverage that can expand the scope of protection and respond to various underlying policies. Commercial excess insurance, on the other hand, primarily serves to increase the limits of an existing policy without changing its terms and conditions. The choice between the two depends on the specific needs and risk exposures of a busines