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Law Firm Insurance

Commercial Umbrella for law firms

Provides an additional layer of liability protection above your primary policies when a catastrophic claim exceeds underlying limits.

Commercial Umbrella insurance for law firms

Key Takeaway

Provides an additional layer of liability protection above your primary policies when a catastrophic claim exceeds underlying limits. A single severe bodily injury claim from a car accident during firm business, or a catastrophic premises liability event at the office, can easily exceed standard $1,000,000 primary policy limits.

Overview

Commercial umbrella insurance provides excess liability coverage that sits above your primary general liability, auto liability, and employers liability policies. When a claim exceeds the limits of an underlying policy, the umbrella kicks in to pay the excess amount up to its own limit. Some umbrella policies also provide drop-down coverage for certain claims not covered by underlying policies, subject to a self-insured retention. This coverage acts as a financial safety net against catastrophic losses that could otherwise threaten the firm's assets and future viability.

Why it matters for law firms

A single severe bodily injury claim from a car accident during firm business, or a catastrophic premises liability event at the office, can easily exceed standard $1,000,000 primary policy limits. Law firms with significant assets, high-earning partners, and professional reputations to protect cannot afford to be underinsured on liability exposures. An umbrella policy provides peace of mind at a relatively low incremental cost compared to increasing limits on each individual underlying policy.

Typical Limits

Umbrella policies are available in increments of $1,000,000, with law firms commonly carrying $2,000,000 to $5,000,000 in umbrella coverage. Larger firms or those with significant auto fleets may carry $10,000,000 or more. Self-insured retentions for drop-down coverage are typically $10,000. Umbrella policies require minimum underlying limits, usually $1,000,000 per occurrence on general liability and $1,000,000 combined single limit on auto liability.

Coverage at a Glance

FeatureSmall Firm (1-5 attorneys)Mid-Size Firm (6-25 attorneys)Large Firm (25+ attorneys)
Typical Limit$500K/$1M$1M/$3M$5M+
Typical Deductible$2,500-$5,000$10,000-$25,000$25,000-$100,000
Annual Cost Range$2,500-$8,000$15,000-$60,000$50,000-$500,000+
Priority LevelEssentialEssentialEssential

Frequently asked questions about commercial umbrella

Why doesn't an umbrella policy extend over malpractice?
Commercial umbrella policies are designed to provide excess coverage over general liability, auto liability, and employers liability -- casualty-type risks. Professional liability (malpractice) is a specialty line with fundamentally different risk characteristics. If you need higher malpractice limits, you must purchase them through your professional liability carrier or a separate excess professional liability policy.
What is the minimum underlying coverage needed for an umbrella?
Most umbrella carriers require minimum underlying limits of $1,000,000 per occurrence on general liability, $1,000,000 combined single limit on commercial auto, and statutory limits on workers compensation with $1,000,000 employers liability. Insufficient underlying limits can void the umbrella coverage or create an uninsured gap.
How affordable is umbrella coverage for law firms?
Umbrella coverage is one of the most cost-effective ways to increase your firm's liability protection. A $2,000,000 umbrella policy typically costs $800 to $2,000 annually for a small law firm, and each additional million of coverage costs proportionally less. The cost per million of coverage decreases as limits increase.
Does an umbrella cover personal injury claims like defamation?
Yes, most commercial umbrella policies extend coverage to personal injury claims including defamation, libel, slander, invasion of privacy, and false arrest -- provided the underlying general liability policy also covers these claims. This broader coverage is one advantage of a true umbrella over a follow-form excess policy.
Can an umbrella policy drop down to cover claims below underlying limits?
Yes, a true umbrella policy (as opposed to a follow-form excess policy) can provide coverage for claims that fall outside the underlying policies, subject to a self-insured retention, typically $10,000. This drop-down feature fills gaps between underlying coverages that an excess-only policy would not address.

Common questions about commercial umbrella

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