Commercial Umbrella Insurance
Is Commercial Umbrella Insurance Tax Deductible?
Yes — commercial umbrella premiums are deductible as ordinary and necessary business expenses. Consult your tax advisor for specifics on your situation.
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Is commercial umbrella insurance tax deductible for contractors?
Business insurance premiums, including commercial umbrella, are generally deductible under IRS rules as ordinary and necessary business expenses. The deduction is taken in the year the premium is paid.
There are no special complications with umbrella deductibility compared to other business insurance. It’s treated identically to GL, commercial auto, and workers comp premiums for tax purposes.
If your umbrella covers both business and personal liability (which is unusual — commercial umbrella is typically business-only), only the business portion is deductible. Pure commercial umbrella is 100% deductible.
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