If your business relies on working on other people’s property or has considerable assets at risk, umbrella coverage offers increased liability protection at a relatively reasonable cost.
Insurance riders usually augment coverage limits of policies such as general liability insurance, commercial auto insurance and business property insurance policies.
1. Additional Coverage for Excess Liabilities
Umbrella insurance can extend the limits of existing liability policies for your business, providing extra protection in case damages exceed what your existing policies can cover. For instance, should your company be sued for damages that go beyond what your commercial general liability, employer’s liability, or hired/non-owned auto policy allows, an umbrella policy could help cover any remaining cost related to claims filed against it.
An umbrella insurance policy typically offers more expansive coverage enhancements than excess liability policies; however, due to their higher aggregate limits they are typically more costly. Ideal candidates for umbrella coverage include businesses at an increased risk of litigation such as contractors or hospitality establishments with high net worth clients.
Customers of NEXT can quickly add a $1 million or $2 million commercial umbrella policy by simply selecting it in the ‘Additional Coverages’ section of their general liability policy. Find out more about how NEXT works here.
2. Additional Coverage for Non-Owned Vehicles
Small business owners with multiple company vehicles are at increased risk for vehicular accidents, which may lead to injuries and property damage that exceed primary policy limits quickly. Umbrella insurance provides extra coverage against this loss.
Businesses that operate offsite or at clients’ premises are at an increased risk for property damage incidents, which may require expensive legal defense costs to defend. Umbrella policies provide coverage against these risks.
Umbrella policies can also fulfill contractual liability coverage requirements, making them an affordable way of providing extra protection for your business. A knowledgeable insurance professional can assess your risk and recommend the optimal limit for an umbrella policy.
3. Additional Coverage for Business Interruption
Contrasting with excess liability insurance policies, umbrella policies tend to offer greater flexibility with regard to which primary policies they can supplement as well as higher limits of coverage and provide businesses with more comprehensive solutions.
Umbrella policies often provide business interruption (BI) coverage, which provides reimbursement of lost net income following property losses that qualify under standard commercial property or BOP policies. This protection may not always be included within standard policies; umbrella policies offer it separately as an add-on coverage option.
As your business evolves, so will its risks and coverage requirements. Working with an experienced insurance professional, an expert insurance agent can assist with identifying potential vulnerabilities and determine if a commercial umbrella policy would provide adequate coverage – should that be the case, we can bundle all your business insurance to save money while streamlining claims processing.
4. Additional Coverage for Loss of Income
Umbrella insurance helps protect both your assets and livelihood from being subject to financial devastation caused by major lawsuits, helping maintain healthy cash flows, achieve future business goals, and avoid liquidating potential future earnings to pay legal expenses or cover other expenses.
Imagine you’ve been sued by a client alleging your company caused serious bodily injury with subpar construction work on their property, and they file suit. Should the verdict go in your favor, an umbrella policy can provide coverage of up to its limit for any judgment awarded against your company.
Are You Looking to Add Umbrella Coverage to NEXT Coverage? Do so Instantaneously By Navigating Your Customer Portal. Select “Add an Umbrella Policy Next to Existing General Liability Plan.”
5. Additional Coverage for Property Damage
Umbrella policies provide extra protection by increasing the limits of primary coverage. They often provide first-dollar claims coverage that exceed the limit of an underlying policy such as General Liability or Commercial Auto. Umbrella policies may be particularly beneficial to companies that work on clients’ property such as plumbing or repair businesses that expose themselves to higher risks of third-party bodily injury and property damage claims.
Other types of insurance to consider for your small business include workers’ compensation for employee injuries, professional liability protection against lawsuits over service or product failure, and commercial property coverage to cover repairs after unexpected events. Your advisor can assist in evaluating potential risk and help decide if additional protection is required.