Every business owner knows that buying insurance is essential for safeguarding your company. However, if you think there is a possibility that your coverage amount may not be sufficient to cover your losses, consider signing up for umbrella insurance for complete protection.
How Does Umbrella Insurance Work?
In certain situations, your existing policy may not cover all the claims. If a customer falls on the premises of your commercial space, the injury not only results in medical bills but may also prevent the customer from working. In this case, you may get sued for an amount much higher than what your policy covers.
Let’s say your primary policy provides coverage of $2,00,000. The customer sues for $2,50,000. With umbrella insurance, you won’t have to pay out-of-pocket for the remaining $50,000.
Which Types of Small Businesses Need Umbrella Insurance?
Generally, businesses with greater liability risks should look into getting an umbrella policy. To qualify for umbrella insurance, ensure that your existing policy provides coverage of $1 million.
If your small business meets the following criteria, it can benefit a lot from an umbrella policy:
• If the business needs more liability protection
• If it requires a high liability policy limit to work with a new client
• If your existing policy is not comprehensive and does not cover everything
What Does an Umbrella Policy Cover?
An umbrella policy does not add to professional liability insurance. For example, any lawsuit arising from negligence, misrepresentation, or other professional mistakes are not covered by this policy.
However, it can support liability coverage of the following policies.
• General liability insurance
• Employer’s liability insurance (often included in workers’ compensation)
• Commercial auto insurance
Getting umbrella insurance for small businesses can give you a variety of benefits along with the peace of mind. For assistance with all your commercial insurance questions, contact the experts at John E. Peakes Insurance Agency. We are committed to providing the best services.