Business umbrella insurance is an optimal added level of protection for most businesses when they need to invest further to protect their interests. It works by extending beyond the limits of other insurance policies to protect businesses from financial devastations.
Commercial Umbrella Insurance
It does not cover everything as businesses need other insurance policies to secure foundational coverage, such as general liability insurance. Do you have risk exposures where coverage limits are not fully meeting them? It is beneficial to know if this protection suits your business.
What Businesses Benefit from Commercial Umbrella Insurance?
Commercial umbrella insurance could benefit just about any business, although each business has its unique risk exposures, and therefore some can benefit from this more than other companies. A business umbrella policy is a vital protection if your business has the following:
- Commercial property open to the public (increases the likelihood of injuries occurring on your property or claims relating to inappropriate employee acts)
- Employees working on other people’s property (dramatically increase the risk as even accidental property damage can lead to a considerable lawsuit).
- Contractual obligation to carry business umbrella insurance either from the government or a customer.
- There is a high risk of a lawsuit. Only home-based sole proprietorship businesses with no employees, no subcontractors, and no direct contact with clients may not be likely to need commercial umbrella insurance.
More Coverage and Exclusions
Business umbrella insurance covers what other insurance policies don’t, which are claims beyond the limits of your underlying policies. A business umbrella insurance policy can cover the difference. Keep in mind that even multiple more minor claims can max out underlying insurance policies. Likely, this protection steps in after the underlying policies have been exhausted.
There are also specific claims that the underlying policies will not cover. For instance, a business’s general liability coverage typically only covers equipment you own. Therefore, if rented equipment becomes damaged, you are liable for those damages if you lack business umbrella coverage. Note that there are no insurance plans that provide unlimited protection. Some of the areas not covered by business umbrella insurance are errors and omissions, criminal activity, and property insurance claims. These are in their categories of specified risk. Also, you can even max out umbrella policies if the claims exceed the limits. Therefore, high-risk businesses should build a strategic cash reserve.
Further Considerations
Business umbrella insurance goes beyond underlying coverages on a “follow form” basis. You must first max out the underlying coverage before leaning on business umbrella coverage. Another primary consideration is cost. The cost of business umbrella insurance is dependent on many factors. Thus, certain aspects go into this, like the industry your business operates and its unique risk exposures. For example, high-risk industries like construction and manufacturing will have higher rates than low-risk industries. Speak to your insurer about your standing with the risk bracket. You may also be able to qualify for discounts if you go with insurance bundles.
About Sine Insurance
At Sine Insurance Group, we are dedicated to providing you with custom-tailored insurance policies to protect your assets. Our comprehensive packages have been expertly crafted to serve St. Louis and the surrounding areas for the past 25 years. For more information about our products, contact us today at (855) 700-0889.