October 24, 2019 in News by Thompson Insurance, Inc.
For most commercial insurance policies, it’s pretty clear why and when you would need them. As a business owner, you need commercial auto insurance in case your driver gets into an accident. You need workers’ compensation in case an employee gets injured on the job. But why do you need a commercial umbrella policy when you already have what you believe to be sufficient limits in place?
The truth is, a commercial umbrella policy is going to come into play on a very rainy day.
The basics of commercial umbrella insurance coverage
Umbrella coverage is essentially extra liability coverage that goes beyond the initial limits of your other liability policies. This means if a claim exceeds the initial limits on your general liability, employer’s liability, or commercial auto liability, your umbrella policy is going to kick in and cover the remaining costs.
If you were held liable for a $1.5 million claim, and you only had $1 million under your general liability, the umbrella would cover the remaining $500,000. Without an umbrella policy, this $500,000 would be coming out of your own pocket.
Do you need commercial umbrella insurance?
For most businesses, the short answer is, “Yes. Most likely, you should have a commercial umbrella insurance policy in place.” That being said, there are some factors that would change this answer to a definite “Yes!”
If you have company drivers on the road, most insurance agents would say an umbrella policy is an absolute must. If your driver happens to be at fault for an auto collision, those auto liability costs can quickly add up. Especially if someone was severely injured or worse, your costs can easily get into the millions of dollars.
On the other hand, if you work in a high-hazard industry like construction or manufacturing, it’s smart to have an extra million dollars or more in umbrella coverage. Serious accidents happen, and they’re often beyond your control. When they do, this is one policy you do not want to be without.
What’s the cost of a commercial umbrella policy?
A commercial umbrella policy is so affordable that it’s not a bad idea to get an extra million dollars or more in coverage. Depending on your business, you can get an extra $1 million in coverage from anywhere between $500 and $1,500 a year.
How much coverage you should have under your umbrella policy greatly depends on your business, and it’s a great idea to sit down with your insurance agent to discuss the amount that makes sense for you.
Though you hope you never need it, if you do, you’ll sure be glad you have an umbrella policy in place.
Contact Thompson Insurance in Birmingham and Montgomery, AL, for more information on commercial umbrella insurance
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