In the world today, where the rate at which lawsuits are being filed is skyrocketing and increasing every day, however, this can affect businesses when it comes to potential financial liabilities that can be a threat to their viability and stability. Nonetheless, commercial umbrella insurance is important as it safeguards and protects the business, providing an extra layer of security that surpasses the limits of a standard business liability insurance policy.
Apart from this, this form of insurance is specifically designed to safeguard business owners from the possible cost of claims that exceed their capacity for basic insurance coverage. So, whether it is a customer injury on the company’s property, legal claims, or a serious accident involving the company’s vehicle, commercial umbrella insurance offers proper coverage.
What Is Commercial Umbrella Insurance?
Commercial umbrella insurance is a type of liability insurance that offers extra or additional coverage that exceeds or surpasses the coverage and limits of other types of policies. This type of insurance is quite useful when it comes to the cost of injury claims, lawsuits, or other liabilities that exceed the existing liability policy limits of the business. For example, employers’ liability insurance, commercial auto, or general liability.
How does it Work?
Understanding the concept of commercial umbrella insurance is quite straightforward, as it offers an additional layer of protection to the policyholder. Thus, when your client or customer files a claim against your business and it exceeds the coverage limit of your primary liability quote, your commercial umbrella quote will assist by making up or covering the excess amount up to the limit of the policy. Settlements, legal fees, and other associated costs are included. As for businesses looking to protect themselves against substantial financial damages associated with lawsuits or major claims, having this type of insurance is crucial.
What does Commercial Umbrella Insurance cover?
Commercial umbrella insurance usually offers coverage for these:
- Commercial auto insurance.
- General liability insurance.
- Employers’ liability insurance.
- Other specialized liability policies.
Scenarios like these are also covered:
- Serious car accidents involving company vehicles.
- Major lawsuits.
- Significant injury claims that surpass primary policy limits.
- Third-party property damage.
- Slip-and-fall injuries.
- Employee injury lawsuits.
What Are Its Exclusions?
Similarly to any insurance quote, this insurance does not offer coverage for everything, and its exclusions may include:
- Liability under workers’ compensation laws.
- Intentional acts.
- Employment practices have liabilities.
- Liability due to war or armed conflicts.
- Professional liability.
Who needs a policy?
This is an important question that you need to ask yourself before purchasing a commercial umbrella policy. If you fall into any of these categories, it is advisable to purchase this type of insurance for protection:
- Retail businesses.
- Schools and educational institutions.
- Businesses use subcontractors or independent contractors.
- Entertainment venues.
- Construction companies.
- Businesses with high public exposure.
- Technology firms.
- Manufacturing companies.
- Landlords and property management companies.
- Professional service providers.
- Restaurants and bars.
- Large corporations with significant assets.
- Non-profit organizations.
- Transportation and logistics companies.
- Healthcare facilities and providers.
In summary, any company or industry that is prone to or exposed to lawsuits that require payouts higher than their insurance limits should consider commercial umbrella insurance.
Commercial Umbrella Insurance Cost
The average cost of getting a commercial umbrella insurance policy is $75 per month. Nonetheless, there are several factors that affect the cost of getting this insurance policy, and they include:
- Number of vehicles.
- Risk involved.
- Insurance company.
- Number of employees.
- Coverage limits.
Normally, the premium cost is affordable, unlike the added coverage limits provided.
How to Get Commercial Umbrella Insurance
Obtaining commercial umbrella insurance is a wise decision for businesses that are looking to safeguard themselves from the possible costs of large liability claims that exceed their primary insurance quotes. Here is the step-by-step guide you need to get this type of policy from any insurance provider:
- Evaluate your coverage needs.
- Speak to an insurance professional.
- Prepare the necessary documentation.
- Compare quotes.
- Select a policy.
- Review the details of the quote.
- Purchase the policy.
- Review regularly.
- Update your coverage.
You can also add umbrella insurance to your overall risk management to help you mitigate the risks involved and get proper coverage.
Frequently Asked Questions (FAQs)
Is commercial umbrella insurance mandatory?
Owning or having a commercial umbrella insurance policy is not legally mandatory. However, this form of insurance is invaluable when it comes to offering protection against possible financial decisions.
Can I purchase umbrella insurance without primary policies?
No, umbrella insurance is created to be additional and requires basic liability quotes to be available and accessible.
How much umbrella insurance should my business have?
The amount of coverage you should have with an umbrella insurance policy depends on your business’s risks and exposure. If you need help determining the proper limits, you can consult a professional.
Does umbrella insurance cover damage to my business property?
No, umbrella insurance covers liability claims only, and property damage is not included. Nevertheless, you can get property damage coverage from a commercial property insurance policy.