Commercial Umbrella Insurance
Any given business, at some point, is prone to hold excessive liability coverage. Unfortunately, incidents like accidents are unavoidable. The chances of your business being subjected to a lawsuit that is a far way higher than your pre-existing insurance policies can be nerve-wracking. Having said that, as an entrepreneur, you need to evaluate your budget and gauge whether commercial umbrella insurance is worth the extra mile of investment for your business.
What is commercial umbrella insurance?
This coverage policy is customized to cover all other insurance policies just if the existing insurance policy limits become drained. The word “umbrella” best describes the protective part of this policy for your potential liability risk. For instance, if your company has a fleet of employed drivers for delivery services, then it means your consideration for commercial umbrella insurance cover will be a priority as chances of them being exposed to accidents and other risks will also be higher. In some cases where you need to bind a contractual agreement with the government, this given cover is also mandatory.
Under which circumstances do I need commercial umbrella insurance?
First, it depends on the nature of your business. Once you have valued that your current liability policies are likely to exceed the potential risks that might occur, then you are eligible for this cover. For instance, if you have a high-risk kind of business that involves much exposure to the public like a taxi firm, there are increased chances of risks, and therefore this cover will be of help.
You should also opt for commercial umbrella insurance if your business operates on someone else’s property. For instance, if you have rented some space for your gym services, you will need something more to cover for any potential harm, accidents, injuries, or even property damage resulting from the third person.
Therefore, your company’s exposure to the public is a factor that demands this coverage policy. When there is a likelihood of an increased risk of liability claims from third parties, you need to invest in the umbrella insurance cover.
Why do I need umbrella Liability insurance for my business?
Basically, there is no supreme cover that will protect your business from the usual untimely accidents. Therefore, risks, damages, and accidents are part of what to expect while running a business. You, therefore, need a protective strategy just in case the worst happens.
Many businesses might lack enough funds to pull through a devastating lawsuit, especially without a policy cover. Therefore, commercial umbrella insurance is the ideal risk management strategy when you need protection during such catastrophic scenarios.
What exactly does the umbrella liability insurance cover?
Much as you already have existing insurance policies, at some point, when it comes to the worst, your claims can exceed the limits of your policies that are meant to cover for the business liabilities along with extra coverage. Therefore, the commercial umbrella policy extends your liability coverage to enhance more pay-outs that will help you cover all the significant claims. These are some common liability claims this policy can cover:
Reputation damage
Product liability
Customer injury
Motor vehicle accidents
Whenever the claims are more than your policy coverage limits for your business’s liabilities, an umbrella insurance cover remains the ideal option. It goes beyond the limits of the existing policy and pays out for any remaining excessive claims.
How does umbrella insurance work?
Apart from saving your business from bankruptcy, this cover works more of a cushion for your business against the unplanned internal expenses. Imagine if one of your company vehicles leads to several accidents along the way because of your driver’s negligence, given that your claims amount to $500,000 while your policy covers only $300 000. Then it means your business should cover up for the deficit, but in case you had an additional umbrella policy, then it will cover the remaining $200,000.
However, the umbrella insurance policies will not cover everything that the insurance policy fails to cover. The underlying policy needs to have a connection with it. For instance, if you need an umbrella for automotive liabilities, you should first have an automotive, commercial policy. Additionally, the umbrella insurance policy does not cover for property claims, irrespective of whether you have a commercial policy or not.
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All this having been said, it leaves no doubt that having an umbrella insurance cover is an ideal option for every business person. It is also cheaper given that the premiums are reduced for every additional dollar of what has to be covered than the usual primary policies. Having a broker to guide you on the terms and conditions and any other needful information concerning the claiming process is essential.
This insurance cover will save your time and money, adding more value to your business. If you need further assistance and clarification, do not hesitate to contact us to help you make this wise decision.
Click on: http://advisorsmith.com/commercial-umbrella-insurance.