Recently, we covered the basics of commercial umbrella insurance: What is it, and is it right for your business? This month we will go into a few more details and look at some of the cases where commercial umbrella insurance may apply.
What commercial umbrella insurance covers
Commercial umbrella insurance is about extending different types of liability insurance. In this day and age, there is a real risk of being sued and we can not always predict the many ways in which things can go wrong during daily activities. And as large settlements, sometimes in the millions of dollars, become more common, it is increasingly possible that your business may suffer an assessment that your primary liability policy cannot handle. This means that if you are held liable and owe $ 2 million, but your insurance maximizes $ 1
Different types of liability
As a small business owner, you probably have liability insurance, commercial car insurance and employee compensation. Commercial umbrella insurance can be purchased to improve liability insurance for any of these insurances, or for all three.
In addition, commercial umbrella insurance sometimes covers costs that your primary insurance may not have covered, such as legal fees. Commercial umbrella insurance can also play a role in the following situations:
- A customer or employee is seriously injured on your corporate property.
- You are being sued for libel or slander.
- An employee uses a copyrighted image or song without securing the appropriate permission.
- You cause major damage to a customer's property during business operations.
- A defective or damaged product harms a customer or employee.
- An employee ends up in a car accident that injures someone else.
Things to Know Before Buying Commercial Umbrella Insurance
- You Must Have the Right Underlying Insurance: Commercial umbrella insurance cannot be purchased without having primary insurance, and it will not start until the limits of that insurance are met.
- There are certain things that a commercial umbrella policy is unlikely to cover, including professional errors, damage to your personal or business property and discrimination lawsuits.
- If you have to use your commercial umbrella insurance, it can be applied automatically or you may need to file two separate claims.
If you work in an industry with many unknown risks, commercial umbrella insurance may be right for you. Talk to your insurance agent to find out how to add this extra protection to your business.
For all business related insurance questions, call or contact Keller-Brown Insurance Services today.