Umbrella insurance, also known as excess liability insurance, is one of the most overlooked and underused personal lines of protection. It sits on top of your existing policies such as your auto insurance policy or homeowners/renters policy to give you additional liability limits.
As a business owner, you want to protect yourself from unforeseen circumstances. You can do this by purchasing umbrella insurance, which will give you the peace of mind of knowing that you’re covered in the case that you’re sued due to something related to your business.
Umbrella insurance policies are often purchased by people who are self-employed or have a limited liability company (LLC) or corporation. Umbrella insurance is also purchased by people who want additional protection from lawsuits or judgments against them for accidents that occur on their property.
If your general liability policy limits are low, it might be worth it to consider an umbrella policy. An umbrella policy can also add coverage for things not typically covered by general liability insurance (e.g., disparagement, damage or destruction of property, emotional distress).
Umbrella policies do have some limitations:
- They won’t cover every type of claim you might face; they’re best suited to protect against high-dollar claims.
- The coverages may be limited depending on the amount of your deductible (the amount you’d have to pay before the insurer would begin paying).
- Umbrella policies tend to cost more than basic liability coverage because they provide more protection than a standard policy provides. They often come with additional requirements for eligibility and exclusions for certain types of claims that may be excluded from your general liability policy but still need to be protected against.
Umbrella insurance policies can help protect businesses against large lawsuits. Whether it pertains to a car accident or personal injury, the liability coverage will help pay for damage paid out of pocket. Other policies such as property, commercial, and auto insurance may not typically cover these claims. They may reimburse your legal defense costs, but you would still have to pay the costs of damages out of pocket if sued. Umbrella insurance has helped companies avoid large financial risks and have peace of mind about their insurance plans in case a lawsuit is filed against them.
Do you have questions about commercial lines insurance? Schedule a no-obligation consultation with a commercial lines insurance expert through TelaClient.com!