A Commercial Umbrella policy, which is often called excess liability, may afford additional coverage above and beyond the smaller policies that you have in place for your business.
Usually, those smaller policies may include any combination of your Employer’s Liability, General Liability policy, and hired and non-owned Commercial Vehicle policies; umbrella policies can provide additional coverage for all of those.
If you have, for instance, a million dollars in coverage, you may add an umbrella policy in order to maximize the protection of your business assets, in case there’s a loss that exceeds that amount.
As a practical example, let’s suppose that a covered claim someone makes against you is awarded $1,500,000. Let’s also say that you have $1,000,000 in general liability coverage. In the case of an event like this, your umbrella policy would provide the additional $500,000 to settle the claim, saving your business a lot of money and stress.
A commercial liability umbrella policy is one way to increase coverage of several policies while at the same time keeping your overall premiums down.
When considering how much coverage your business needs, several factors come into play. You’ll need to take several things into consideration as you figure out the appropriate amount of excess liability coverage. Some of those factors include the kind of business you own, the assets of the business, and the coverages your business already has in place.
Generally speaking, standard coverages will take care of most situations that are likely to occur, although in extreme situations, it’s important to protect the assets and the general well-being of your business.
You should also remember that a commercial umbrella or excess liability policy will not protect either Errors and Omissions or other risks that would fall under the auspices of a Professional Liability Policy.
A discussion with your licensed insurance professional to develop an analysis of your current business coverage and decide whether a commercial umbrella policy is necessary for your individual situation could be the key to the salvation of your company in the event of a serious claim against your business.
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