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Higher liability limits for growing practices
Commercial umbrella insurance adds liability limits above a dental practice's general liability, auto liability and employer's liability, and it pays once those underlying limits are used up. It usually won't raise your malpractice limits, because the standard umbrella form excludes professional services and names dental treatment in that exclusion.
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What commercial umbrella insurance does for a dental practice
A commercial umbrella is a second layer of liability limits that sits over the policies you already carry. When a covered claim uses up an underlying limit, the umbrella picks up from there, up to its own limit. If an underlying aggregate runs out during the year, many umbrellas drop down to take its place.
For a dental practice, the umbrella usually sits over three things:
- General liability, including the GL inside a business owner's policy. See general liability for dental offices.
- Auto liability, either owned vehicles or hired and non-owned auto (HNOA), which covers the practice when a team member drives a personal car on a practice errand.
- Employer's liability, Part Two of a workers' comp policy, which responds when an injured employee or a family member sues the practice, or stop-gap coverage in Ohio.
Umbrella or excess liability insurance?
People use the two names interchangeably, but they aren't identical. A follow-form excess liability policy copies the wording of the policy under it and only makes the limit taller. An umbrella can be broader, and some pick up certain claims the underlying policies don't, after a self-insured retention. Either way, you have to keep the underlying limits the umbrella lists. If one lapses or drops, the gap is yours to pay.
HNOA and the umbrella
Hired and non-owned auto covers the practice's own liability when an employee's car is used for practice business. It doesn't repair the employee's car, and the employee's personal auto policy usually pays first. The umbrella sits above HNOA once the practice's own auto limit is exhausted.
What a commercial umbrella usually covers for a dental practice, and what it doesn't
| What it usually covers | What it usually doesn't |
|---|---|
| Extra limits over GL for visitor injuries and damage to others' property | Malpractice and other professional services claims |
| Extra limits over owned or hired and non-owned auto liability | Workers' comp benefits owed to an injured employee |
| Extra limits over employer's liability, where underlying EL exists | Repairs to an employee's own car |
| Dropping down when an underlying aggregate is exhausted (on many forms) | The gap if you let a required underlying limit lapse |
When a dental practice reaches for its umbrella
Most years, a practice never touches its umbrella. These fictional scenarios show when the extra layer matters, and when it doesn't.
Example scenario: a lab drop-off on a Wednesday
A sterilization tech at a solo practice drives her own car to drop a case at the dental lab on a Wednesday afternoon. She runs a red light and injures two people in another car. Her personal auto policy pays first, then the practice's hired and non-owned auto. Their combined limits fall short of the settlement, and the umbrella may pay the rest, up to its limit.
Example scenario: the stairwell in January
A group practice owns its two-story building. On a Tuesday in January, a visitor falls on the stairwell between floors and suffers a spinal injury. The verdict exceeds the practice's $1 million general liability limit. The umbrella responds above it, which is why owners of their own buildings often carry one.
Example scenario: the implant claim the umbrella didn't touch
An oral surgery and implant practice faces a nerve-injury claim on a Thursday that settles above its $1 million per claim malpractice limit. The owner expects the umbrella to cover the difference, but the umbrella excludes professional services, so the excess comes out of the practice. Higher malpractice limits or a professional liability excess policy would have been the right tool.
What changes the price of a commercial umbrella
An umbrella is priced off the exposures underneath it. The things that move it most are:
- the umbrella limit you choose
- how many locations you run and whether you own any of the buildings
- owned vehicles, how often staff drive for the practice, and who those drivers are
- payroll and headcount, which shape the employer's liability exposure
- the claims history on your GL, auto and employer's liability
What the rest of your program costs depends on your building and equipment values, your revenue and payroll, how many locations and team members you have, the limits you choose and your claims history.
Underlying limits matter too. An umbrella carrier sets minimums for the policies beneath it, and meeting them sometimes means raising your GL or auto limits first. That can add a little premium on those policies, so price the umbrella and its underlying requirements together rather than one at a time.
Timing matters as well. Lining up the umbrella's renewal date with your GL, auto and workers' comp renewals keeps the underlying schedule current and makes it easier to spot a limit that changed. When you add a location, a vehicle or a building, tell the umbrella carrier along with the underlying ones.
Which dental practices need an umbrella
Not every practice needs one, but these often do:
- Practices with a lease or loan that asks for one. The lease or the loan commitment sets the number. Our practice purchase guide covers lender and landlord requirements.
- Groups and multi-location practices. More offices means more foot traffic and more drivers. Group practice insurance
- Dental groups and DSOs. An umbrella adds liability capacity across locations for GL, auto and employer's liability. It doesn't add malpractice capacity. Coverage for dental groups and DSOs
- Dental labs with delivery routes. Vans on the road every day make auto the exposure that pushes limits up. Dental lab insurance
- Practices that own their building. Stairs, parking lots and common areas are yours to answer for.
State notes for umbrella coverage
Umbrella forms read the same from state to state, but workers' comp rules change what sits underneath.
- Ohio: the state fund doesn't include employer's liability, so Ohio practices usually buy stop-gap employer's liability, often as an endorsement to the GL policy. That stop-gap is what the umbrella sits over for employee injury lawsuits.
- Texas: private employers may opt out of workers' comp as non-subscribers. The standard umbrella's employer's liability exclusion applies except where valid underlying employer's liability insurance exists, and a non-subscriber sued by an injured employee loses several common-law defenses. A non-subscribing practice should ask how employee injury suits would be handled before counting on an umbrella.
For other states, see our state pages.
Related coverage
Umbrella insurance questions from dental practices
Does a commercial umbrella policy cover dental malpractice?
How do dentists get malpractice limits above $1 million?
Is excess liability insurance the same thing as an umbrella for a dental office?
Does an umbrella cover staff driving their own cars for the practice?
How much umbrella coverage does a dental practice need?
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