What Is Commercial Umbrella Insurance
Sep 14, 2022 | Business, Guide
Youve probably heard of umbrella insurance, a type of coverage that protects you if a claim exceeds your insurance policys limits. But you might not be familiar with how it works, why your business may need it, and how it differs from excess insurance and regular insurance coverage.
Commercial umbrella insurance fulfills a specific business need: to increase the liability coverage you already have in your commercial general liability, commercial auto, and employers liability coverage. If youve purchased a business owners policy , an umbrella policy can extend your coverage as well.
The key is to have these underlying policies in place first. Umbrella insurance is written on top of your existing coverage. For example, if you dont carry commercial auto insurance, an umbrella policy wont cover your employees if they cause an accident since you dont have the underlying coverage.
In addition, umbrella protection extends your coverage only when your business is liable for property damage, personal injury, or advertising injury. Its not meant to increase your commercial property insurance limits.
Is Umbrella Coverage Right For You
It sounds pretty great extra coverage and the feeling of satisfaction that comes along with it. But it is supplemental insurance, so theres an additional charge and may never be necessary. To take the risk out of the decision youll need to:
If you can relate to any of the three points above, reach out. Schwartz Reliance can help you determine if youll benefit from an umbrella policy. We can also help improve your current coverage, so the additional policy may not be necessary. Either way, were happy to help.
What Is A Commercial Umbrella Insurance Policy
Commercial umbrella insurance is a form of insurance that helps businesses in the event that they are sued or have other legal disputes. Unlike personal umbrella insurance, which is designed to protect individuals from catastrophic financial losses, commercial umbrella insurance can help businesses cover a range of potential liabilities, such as:
Legal fees and expenses Damages to property or equipment
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Reasons To Purchase An Umbrella Policy
Many businesses purchase a commercial umbrella because they need more protection against large losses than their primary policies can provide. While any firm can be hit with a large claim, some businesses are more vulnerable to catastrophic losses than others. Examples are construction contractors, tree trimmers, and crane operators.
Some businesses obtain an umbrella to fulfill limits requirements in a contract. For example, suppose that Premier Paving has contracted with Busy Builders to construct a parking lot at a new shopping center. The contract requires Premier to maintain a $3 million per occurrence limit for general liability and a $3 million per accident limit for auto liability insurance. If Premier’s primary liability and auto policies have limits of only $1 million, the company can satisfy the contract by purchasing an umbrella policy with a $2 million limit.
The $2 million umbrella will “sit on top of” Premier’s $1 million general liability and auto liability policies, resulting in a total limit of $3 million.
What Does Business Umbrella Insurance Cover
Umbrella insurance covers things like legal fees, medical bills and other costs that exceed your general liability coverage. Business umbrella coverage can be customized for your unique business needs and protect against costly claims, including:
- An accident caused by an employee driving your company vehicle
- A lawsuit filed by an employee alleging an unsafe or harmful workplace
- A lawsuit filed as the result of a drunk driving accident caused by a customer
- Damages caused by an unexpected fire in your business
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What Does A Commercial Umbrella Policy Not Cover
Its important to note that though Commercial Umbrella insurance can protect your business in many ways, not everything will be covered.
For example, the following types of claims would not be covered:
- Uninsured/Underinsured Motorist
- Damage to property loaned to you
- Damage to personal property in your care, custody or control
- Property damage to your work
- Errors & Omissions
- Professional Services
Its important to keep in mind that youll need the appropriate underlying policy in place in order to avoid expensive coverage gaps.
Who Needs A Commercial Umbrella Policy
Any business that is at risk of exceeding the limits of other existing liability policies would benefit from commercial umbrella insurance. Years ago, it was common for only big businesses to have umbrella policies, however, because lawsuit costs can escalate quickly, many smaller businesses have added the additional coverage. You may be interested in a commercial umbrella policy if:
- Your property is open to the public during business hours
- Your business owns many vehicles
- Team members work offsite on others property
- A client requires more liability coverage
- Your line of business is at a higher risk of a lawsuit
The amount of coverage a business needs depends on the type of business and industry. EMC agents can develop a business umbrella quote to expand your coverage to include an umbrella policy that meets your needs.
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How Do I Buy A Commercial Umbrella Insurance Policy For My Business
A commercial umbrella insurance policy requires a detailed assessment of risks as it differs depending on the nature of the business. To get the best umbrella policy for your business, it is best to have an expert evaluate all of your risks, which coverages would be right for you, and a variety of carrier options.
Do I Need Commercial Umbrella Insurance
While nobody technically needs commercial umbrella coverage, we tend to recommend it for most businesses.
We live in a litigious society, where the threats of a lawsuit are very real. And regardless of whether the lawsuit is valid, defending your business wont be cheap and could cause a tremendous financial hardship.
To decide if this coverage is right for you, we recommend assessing how much risk you have and what types of business exposures you face.
Here are a few things to consider when deciding if this coverage is right for you and your business:
- Do you have a substantial amount of assets that you want to protect in the event of a lawsuit?
- Does your business have any contractual obligations or services?
- Do you have employees?
- Do you have a business that is open to the public or your customers?
- Do you have any high-profile or high net-worth clients?
- Does any of your business require a lot of driving or deliveries?
- Does your marketing and branding, website or brochures make any promises or guarantees?
If you answered yes to any of the questions above, you may have more of a risk than other businesses, which could put you at a higher chance for a lawsuit.
Investing in an umbrella insurance policy may be the right choice to ensure you arent facing any large out-of-pocket expenses.
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Why Add Commercial Umbrella Insurance
Many businesses have insurance coverage to help protect against lawsuits and damage claims. Some of the most common include:
- General liability insurance, which helps cover claims of bodily or property damage caused by your products, services or employees.
- Commercial auto insurance, which helps cover vehicles used by your company or employees
- Employer’s liability coverage, which helps cover job-related illnesses or injuries to employees that aren’t covered by workers’ compensation insurance.
Commercial umbrella insurance can act as another layer of protection on top of these insurance policies. It can help cover the costs associated with legal fees, damages and medical expenses, up to your limit.
Umbrella insurance can be used as a way to increase coverage amount by providing higher limits, and it can also fill in some of the gaps in your current policy coverage.
Count On Emc For Quality Umbrella Liability Insurance
When you’re out in the rain, there’s nothing more reassuring than having an umbrella. It keeps you dry, and it’s a great symbol of protection.
Similarly, when your business is facing risks and financial threats, there’s nothing more reassuring than having the right insurance policy to protect it. Our trusted independent agents will work with you to provide your business with the necessary additional coverage that will keep it safe and sound in any situation.
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Ohio Commercial Umbrella Insurance
Ohio Commercial Umbrella Insurance provides an added layer of excess liability insurance coverage when a high-cost catastrophe or accident occurs that exceeds the limits of your commercial liability or other liability coverage. Once the coverage on your liability policy is exhausted, you may be financially responsible for any additional legal expenses, costs of property damage, medical costs for personal injury, or death claims. Serious injuries incur steep medical expenses, as well as payments for pain, suffering, and lost income. Death claims incur funeral and burial expenses, survivor expenses, and more. Jury awards and settlements can drive costs up astronomically. Commercial Umbrella helps protect your business from these potentially ruinous claims.
In Ohio, Commercial Umbrella Insurance can extend the coverage of several of your primary liability coverages:
- General Liability Insurance
- Employers Liability Insurance
- Commercial Auto Insurance
We invite you to learn why so many of your neighboring businesses trust Hitchings Insurance Agency to protect their operations. Discover the difference yourself fill out a free quote form or call us at 419-423-9145 so we can help with your excess liability insurance.
Amazing Hack For A Successful Business: Commercial Umbrella Insurance
TLTR: This article will discuss what commercial umbrella insurance is, why you need it and who needs it the most. Additionally, the article also includes the coverage area, cost, and cost factors.
Many businesses require you to have insurance before you sign contracts to work with them. For example, a premier design studio seeks to collaborate with a group of builders for re-modeling a section of a mall. In this partnership, both parties are going to require contracts that include an insurance clause. So, let us say that the design studio is required to maintain a $3 million per occurrence limit for workers compensation claim.
If the design studios employment practices liability insurance or workers compensation insurance has a limit of less than $3 million then they can satisfy the contract by purchasing commercial umbrella insurance with the required amount of limit.
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Commercial Umbrella Insurance Cost
A commercial umbrella insurance policy with $1 million in coverage can cost as little as a few hundred dollars a year. However, umbrella insurance isnt offered as a stand-alone coverage it works in conjunction with your other liability coverages, such as general liability insurance which is your most expensive policy.
How Much Umbrella Insurance Should I Buy
Commercial Umbrella Insurance is sold in increments of $1 million. The amount of Umbrella Insurance to buy is ultimately a business decision, as it is not possible to have total foresight into all possible risks that a business may face. However, to properly estimate the amount of Business Umbrella Insurance Policy to buy, you should consider the risk exposures that are common to your industry.
For example, if you operate a jewelry store that caters to high net worth clients, you may want to purchase coverage sufficient to cover a high net worth person slipping and falling. Your company might be liable for lost wages for the customer until they are able to return to work, in addition to any medical expenses necessary to treat the fall. If you consider the amount in damages from this type of risk, as well as other typical risks your business may face, you can estimate the appropriate amount of insurance to buy.
On the other hand, if your company is a wholesale company with most work conducted in a warehouse without heavy equipment or hazardous substances and not a lot of customer foot traffic, you may not need as much coverage as a retail store.
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What Are The Benefits Of Having A Business Insurance Umbrella Policy In Place
A business insurance Umbrella policy can provide a number of important benefits for your company. First and foremost, it can help to protect your business from lawsuits arising from lack of sufficient underlying coverage. If someone sues your company because your underlying limits are exhausted and do not cover the total amount of the loss, an Umbrella policy can help to cover the costs of legal defense and any damages that may be awarded. Umbrella policies can also help to cover the costs of any injuries that occur on your property, as well as any property damage that may occur. In addition, Umbrella policies can provide coverage for advertising injuries, such as false advertising or copyright infringement. Umbrella policies can also extend the coverage of your existing business insurance policies, providing additional protection for your business. As you can see, there are many good reasons to have a business insurance Umbrella policy in place.
The Basics Of Commercial Umbrella Policies
A commercial umbrella policy protects your business against large liability losses by providing an added layer of coverage over your primary insurance. It affords extra coverage to help pay for costs that exceed the liability limits on your general liability, commercial auto liability, and other underlying policies. An umbrella safeguards your firm against unexpected claims that could devastate your business and force it to shut down.
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What Is Umbrella Insurance And Do I Need It
Nothing makes you feel like an adult more than shopping for insurance. Thats not necessarily a bad thing, it shows responsibility and brings you and your family peace of mind. But theres a lot of insurance products out there for cars, houses, boats, even umbrellas?
Not exactly, but if you do have a very fancy, high-tech umbrella, decorated with diamonds, then you can insure that umbrella, under your umbrella policy. This article explains
What Is Covered By Business Umbrella Insurance
Commercial umbrella insurance covers the same types of costs as business liability insurance, such as medical expenses, attorney fees and damages when your company faces a lawsuit. Since an umbrella policy is not a standalone policy, it supplements the coverage provided by:
If your business owns and rents equipment and it is damaged, commercial generality liability would cover damages to the owned equipment and commercial umbrella insurance would cover the rented equipment.
Another example of when business umbrella insurance can protect your business is if an employee suffers an injury on the job. If the costs from the accident exceed the workers compensation policy, the umbrella policy would cover the remainder.
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What Do I Need To Apply For Commercial Umbrella Insurance
In order to get an accurate quote for a Commercial Umbrella Insurance policy, you should provide the following information to the insurance company or your broker:
- Basic financial information and details about your business operations.
- Copies of your existing general liability, auto liability insurance, workers compensation, and any other liability insurance policies your company carries. These may include employment practices liability, liquor liability, or professional liability insurance.
- Information about any insurance losses or claims your business may have sustained in the past.
- A biography of the companys officers and owners showing their titles and experience.
- Annual payroll information along with the number of full-time and part-time employees and contractors.
What Does Commercial Umbrella Insurance Cover
Commercial umbrella insurance helps to pay liability claims that exceed the limits of an underlying insurance policy, such as a general liability policy or a commercial auto insurance policy.
A commercial umbrella insurance policy covers the costs of legal expenses, medical bills, damage to someone elses property and court judgments and settlements.
Insurance companies write commercial umbrella policies with aggregate limits ranging from $1 million to $15 million.
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Which Businesses Should Get Business Umbrella Insurance
Any business could benefit from business umbrella insurance. Some businesses are at higher risk than others, though. If any of the following applies to your business, a business umbrella policy should be a strong consideration:
You have commercial property open to the public. Inviting others onto your businesss property opens you up to risk. If someone is injured on your property, or if an employee acts inappropriately, the lawsuits that can follow could quickly exhaust a general liability policy.
You or your employees work on other peoples property. Working on other peoples property means increased risk for your business. Even accidental property damage can result in expensive lawsuits.
You have a contractual obligation to carry business umbrella insurance. This is most common with government contracts. Any customer can require you to carry business umbrella insurance, though. This protects both your business and the customer in the event of a lawsuit.
Your business is at high risk for a lawsuit. Unfortunately, this describes most businesses. The only businesses not likely to need business umbrella insurance are home-based sole proprietorships with no employees, no subcontractors and no direct contact with clients. Even if this describes your business, weigh the risk of being named in a lawsuit before deciding to pass on this additional protection.