How Can I Find Commercial Umbrella Insurance?
A good small business insurance policy not only prepares for the unexpected,but also provides some buffer in the event that your liability insurance is insufficient.This is where commercial umbrella insurance can help.
For example, if your employee is making deliveries and causes a car accident that results in multiple injuries and the medical expenses exceed your commercial car insurance liability limits, your company will be required to pay the additional amount.However, if you have commercial umbrella insurance, the excess amount will be covered by the policy.
Commercial liability insurance is a valuable coverage worth considering, and the best small business insurance policies can be tailored to meet your company’s specific needs.
What Exactly Is Commercial Umbrella Insurance Coverage?
Commercial umbrella insurance provides an additional layer of liability protection for your company.
When a claim exceeds the liability limit on an underlying insurance policy,such as commercial general liability insurance, a commercial umbrella insurance policy kicks in to provide additional liability protection.
What and What Is Covered by Commercial Umbrella Insurance?
Commercial umbrella insurance assists in the payment of liability claims that exceed the limits of an underlying insurance policy, such as a general liability or commercial auto insurance policy.
A commercial umbrella insurance policy covers the costs of legal fees, medical bills, property damage, settlement and court judgments.Commercial umbrella policies with aggregate limits ranging from $1 million to $15 million are written by insurance companies.
What and What Does Commercial Umbrella Insurance Don’t Cover?
Commercial umbrella insurance does not cover all types of insurance claims.A commercial property insurance policy, for example, cannot be included in a commercial umbrella insurance policy.
Assume an office fire destroys business equipment.Without the assistance of a commercial umbrella insurance policy, you would have to pay for these damages with your commercial property insurance coverage.
The Way Commercial Umbrella Insurance Policy Work
Assume your company is sued for $2 million but only has $1.5 million in commercial liability insurance.
Your liability insurance would only cover legal defense costs, settlements,and judgment up to the policy limit, which means you’d be liable for the $500,000 shortfall.
You would have to pay the $500,000 out of your business funds if you did not have a commercial umbrella policy, potentially putting your business at risk.Another option is to use your personal funds, putting your personal financial stability at risk.
A commercial umbrella policy can cover liability costs that exceed the limit of the primary liability policy.
Your commercial umbrella policy would cover the $500,000 shortfall in this scenario.
Who Is Commercial Umbrella Insurance Policy Meant For?
In general, the more your company interacts with clients and customers in person, the higher its liability risk.
And the risks increase if your employees work with heavy or dangerous equipment. Both of these types of businesses would benefit from commercial umbrella insurance to increase their liability limits.
Other possibilities include working on someone else’s property or allowing the public to visit during working hours.If people can visit your business during the day, it increases the risk of bodily injury claims.Working offsite on someone else’s property risks property damage incidents.These are both compelling reasons to obtain additional liability protection through a commercial umbrella insurance policy.
How Much of Commercial Umbrella Insurance Cover Do I Need?
The amount of commercial umbrella coverage you require is determined by the types of risks prevalent in your industry.Commercial umbrella insurance policies with aggregate limits ranging from $1 million to $15 million and are typically sold in $1 million increments.
A retail store (such as a high-end jewelry store) may have different requirements than a business that operates a fleet of delivery trucks or a team of construction workers.It’s a good idea to consult with your insurance agent to determine the right amount of coverage for your company.
What Is the Cost of Commercial Umbrella Insurance?
According to Insureon, commercial umbrella insurance costs about $40 per month for each $1 million of additional insurance coverage.The cost of a commercial umbrella policy is determined by the amount of coverage you select and the level of risk of the business.
According to Insureon, some small businesses (17%) pay less than $500 per year for commercial umbrella insurance, while 36% pay between $500 and $1,000 per year.
One way to save money on a commercial umbrella policy is to pay the entire premium up front.Making monthly payments is convenient, but it will cost you more money over time.If you have the funds, you may want to pay off your commercial umbrella policy in full.
When Is It Necessary to Add Commercial Umbrella Insurance?
What types of liability insurance can benefit from an extra layer of commercial umbrella insurance?candidates include general liability insurance, commercial auto insurance,hired and non-owned auto insurance, and employer’s liability insurance.
Insurance Against General Liability: General liability insurance protects your company against a variety of claims,including bodily injury and property damage claims from clients and customers.Other claims include infringement of intellectual property, reputational harm,and advertising injury.
Insurance for Commercial Vehicles or Automobiles: Commercial auto insurance protects the vehicles you use for business, such as cars, trucks, and vans.A personal auto insurance policy typically does not cover the use of vehicles for business purposes.That is why it is critical to obtain liability coverage through a commercial auto insurance policy.
Auto Liability Insurance for Hired and Non-Owned Vehicles: Employees who rent or use their own cars for business purposes are covered by hired and non-owned auto liability insurance.Because a personal insurance policy will not cover any business-related driving,If you are renting a car for work or driving your own car for work, you must purchase hired non-owned auto liability insurance.
Liability Insurance for Employment Practices: Employment practices liability insurance protects your company from lawsuits brought by your employees.
What Is the Difference Between Commercial Umbrella Insurance Policy and Excess Liability Insurance Policy?
Excess liability insurance can supplement one of your underlying liability insurance policies by providing additional liability coverage.Excess liability insurance, like commercial umbrella insurance, kicks in when an underlying insurance policy’s liability limits are reached and provides additional liability coverage.
An excess liability insurance policy simply adds liability coverage to an existing policy, such as a general liability insurance policy.
A commercial umbrella insurance policy can supplement several liability insurance policies.
Choosing Small Business Liability Insurance
Small businesses frequently choose general liability insurance and commercial auto insurance.You may also want to consider the following additional liability insurance options:
Liability insurance for directors and officers: Defense costs and damages for claims made against a company’s officer or director are covered by directors and officers liability insurance.
Fire legal liability insurance: Fire legal liability insurance protects you if you are found to be liable for a fire in a space you rent or lease.
Insurance for Liquor Liability: When alcohol is supplied during the course of business operations, liquor liability insurance protects a company from injury claims.This is an excellent insurance policy for a restaurant or bar.