A robust small business insurance policy not only prepares you for unexpected events but also provides additional security in case the liability coverage in your base policy falls short. Commercial umbrella insurance offers this supplementary protection.
For example, if one of your employees causes a car accident while making deliveries, resulting in multiple injuries where medical expenses exceed your commercial auto insurance liability limits, your business would typically be responsible for the excess costs. However, with commercial umbrella insurance, this additional amount would be covered.
The most effective small business insurance policies can be customized to meet your specific company needs, and commercial liability insurance is a particularly valuable coverage to consider.
Commercial umbrella insurance provides an extra layer of liability protection for your business. When a claim exhausts the liability limit of an underlying insurance policy, such as commercial general liability insurance, commercial umbrella insurance steps in to provide additional coverage.
Commercial umbrella insurance helps pay for liability claims that surpass the limits of underlying insurance policies, such as general liability or commercial auto insurance. This coverage includes legal expenses, medical bills, damage to someone else’s property, and court settlements or judgments.
For instance, if your company faces a $2 million lawsuit but your business liability coverage only amounts to $1.5 million, your primary insurance would cover costs up to its limit, leaving you liable for the $500,000 shortfall.
Without a commercial umbrella policy, this $500,000 would need to be paid from your business funds, potentially jeopardizing your business. Alternatively, you might use personal funds, risking your personal financial stability.
A commercial umbrella policy fills this gap, covering costs exceeding the primary liability policy’s limit. In this scenario, the $500,000 shortfall would be covered by your commercial umbrella policy.
Generally, businesses that frequently interact with clients in person or use heavy equipment face higher liability risks. This includes businesses operating on third-party properties or those welcoming the public during business hours. Such scenarios benefit greatly from the enhanced liability protection offered by commercial umbrella insurance.
Contact Gines Insurance Agency today so you will be protected from loss.
