There are many different types of commercial insurance. Businesses can have a variety of plans that protect them against a variety of lawsuits, but there are times where those plans are not enough. That’s where commercial umbrella insurance becomes useful. These plans can give your business the added protection it needs to operate without fear of paying out of pocket for a lawsuit verdict or settlement.
What is commercial umbrella insurance? Is it right for your business? Find out more about these types of plans and the protection they provide.
What is Commercial Umbrella Insurance?
Commercial umbrella insurance is a special type of business insurance that protects your company against liability and lawsuits that are brought against it. It acts as an extension of your standard business insurance plans, which can include:
- General liability insurance
- Commercial auto insurance
- Errors and omissions insurance
Your umbrella insurance plan will cover most, if not all, of the same things as your standard insurance plan, but this type of insurance only comes into plan if you exceed the limit of your initial plan. This is why you pay a separate, additional premium.
If your standard liability plan only covers up to a million dollars in damages or losses and you’re hit with a lawsuit that leaves you liable for 1.5 million dollars in damages, you will have to pay out of pocket for the remaining 500,000 dollars that your insurance doesn’t cover. With a commercial umbrella insurance plan, you could be covered for up to 1.5 million dollars or more, depending on the plan you have set up.
Can’t You Just Increase Your Coverage?
Yes. While you could just increase the coverage of your standard liability insurance plan, this is often a more expensive route to go. You’ll pay higher premiums when you increase your coverage, but simply adding a commercial umbrella insurance plan on top of your standard business insurance is often a more cost-effective way to protect your business and its assets.
Additionally, commercial umbrella insurance can also help you fill gaps in your other commercial insurance plans. Umbrella insurance can be added and customized based on the type of business you own and what you need to protect.
Who Needs Commercial Umbrella Insurance?
Just like any other liability insurance plan, commercial umbrella insurance is ideal for any business that interacts with customers on their property, owns and uses a fleet of motor vehicles, or has commercial properties where people work, shop, or frequently visit.
If you are concerned that your business can be exposed based on the current coverage you have with your other business insurance plans, commercial umbrella insurance is a good thing for you to invest in. Lawsuits can wreck a business, and around 43% of businesses are threatened with a lawsuit every single year. Up to 90% of all businesses will experience a lawsuit at some point in their lifespan.
Is Commercial Umbrella Insurance Worth it?
It’s hard to say if commercial umbrella insurance is right for your business without knowing your exact situation, but that’s exactly what we do at The Patrick J. Thomas Agency. Our commercial insurance experts work with you to craft an insurance policy that protects your business in the best way possible, using whatever types of plans are available and affordable to you.
Get in touch with our team today to talk about your business and the insurance plans you need.
Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.