What is commercial umbrella insurance?
A Commercial Umbrella Insurance policy is your business’s second line of defense in protecting itself. It can provides you with an additional layer of liability protection above your business general liability limit. General Liability will cover you to certain limits and then it runs out. Commercial Umbrella Insurance picks up where the General Liability stops.
Why you need commercial umbrella insurance
Most business owners think they don’t need the additional coverage. It is hard to believe that a business could ever need more than what is offered in General Liability coverage. When a catastrophic accident occurs, an umbrella policy can make the difference in a business going under or surviving. Both large and small business could be faced with this. It is important to understand that your car, house, investments and retirement accounts as well as your personal checking and savings accounts, and even future income are all considered assets. All of these assets are exposed when your general liability limits are exceeded.
Large construction businesses are at a higher risk of having catastrophic accidents which could quickly surpass their general liability limits. Contractors are often required to carry a commercial umbrella policy.
Small businesses can benefit from an umbrella as well. An example of a small business is a beauty shop that has a customer that comes in to get her hair done. A child has spilled a drink. Neither you nor your employees are aware of the spill. The customer slips and falls. She is badly injured and has to be transported to a hospital. She is out of work for months due to the injuries and just happens to have a high paying job. Your business could be sued for lost wages, hospital bills, court costs, and lawyer fees. Your businesses general liability limit of $1 million could quickly be used and you would be liable for the amount that exceeded the limit. This could be tens of thousands of dollars.
How to get it
To get a commercial umbrella policy, a business must first have a liability policy in place. It can be automobile liability, general liability, or employers liability. In most instances it is more cost effective to add an umbrella policy to any of these existing liability policies than to raise the limits on your existing policy.
A commercial umbrella policy could be the most cost effective safety net your business could acquire to protect all of your business and personal assets in the event of a catastrophic accident. It would be to your companies advantage to check into your policy limits and what could be available to you.