Depending on the type of business you own, you probably already have a collection of insurance policies to protect you in a variety of specific situations. While these are all important to have in place, you may also want to consider investing in an umbrella policy to supplement your existing coverage. Even if you didn’t think you needed that extra insurance when your company was just starting out, as it grows, it may make sense to acquire extra protection.
WHAT IS UMBRELLA LIABILITY INSURANCE?
An umbrella liability insurance policy will pick up where some of your other coverages leave off in terms of paying for damages for which you’re found liable. It basically acts as a supplement to your general liability, employer’s liability, and hired and non-owned auto liability insurance policies, and it’s available in increments of $1 million.
This means that if your company is sued for property or bodily injury damages caused by an accident on one of your jobsites, your general liability coverage will kick in initially and pay up to its set limit. Without any extra insurance, you would be liable for any amount beyond that, which could be significant depending on the type of damage or injury involved.
An umbrella policy, however, would pick up right where your general policy left off, continuing to pay until the obligation was satisfied or its own limit was reached. Either way, you’d end up paying much less or nothing at all rather than being stuck with a huge bill and potentially losing your business. It’s important to note, however, that umbrella liability policies don’t extend the limits on your professional liability insurance or on errors and omissions coverage.
COORDINATING YOUR POLICIES
Of course, you could always increase the limits on your individual policies rather than purchase another separate type of coverage. But that is almost never as cost effective as investing in the umbrella policy, particularly because it would mean raising your limits on three separate policies rather than simply paying for one more.
You do want to make sure, however, that there is no gap between when your specific liability policies cut off and when your umbrella policy kicks in. Your umbrella policy will have a minimum threshold to trigger paying, and you need to match that up with the maximum payout of your other liability policies to ensure full protection.
While you may think your risk of being responsible for such a large settlement is very small, but there are many factors that can influence the total damages awarded in a lawsuit. For instance, if you find yourself responsible for paying lost wages for an injured executive who was involved in a car accident with one of your employees on the way to a jobsite, you could max out your other policies very quickly.
For these reasons and more, it’s good to explore all your options for acquiring comprehensive liability protection, and our team is always ready to assist you. Call or email us today to learn more about our umbrella liability insurance and the extra protection it can provide you and your business.