In today’s ever-evolving business landscape, it’s essential to ensure that your organization is well protected from potential risks and unforeseen losses. One often overlooked but crucial component of a comprehensive insurance plan is Commercial Umbrella insurance. This powerful coverage serves as an additional layer of protection for businesses and offers peace of mind in the face of unexpected challenges.
Commercial Umbrella insurance policies are issued with $1 million limit layers. This means that the insurer offers additional liability coverage of $1 million at a time, which can be stacked or layered on top of each other to reach the desired total coverage amount.
For example, if a business needs $4 million in liability coverage, it would purchase four “layers” of coverage. Each layer represents $1 million in coverage, resulting in the total desired limit of $4 million. This layered structure allows businesses to customize their coverage based on their specific needs and risk exposure.
Commercial Umbrella insurance is designed to supplement your existing liability policies, such as General Liability, Commercial Auto Liability, and Employer’s Liability insurance. It typically covers the same costs as business liability insurance including medical expenses, attorney fees, and damages related to a lawsuit.
The policy provides excess limits over the primary insurance policies. If a claim exceeds the limits of your primary liability policy, your commercial Umbrella policy will step in to cover the additional amount (up to the Umbrella policy’s limit).
Even the most well-prepared organizations can find themselves facing costly lawsuits or claims. These expenses can quickly escalate, potentially exhausting your existing liability coverage and putting your business at risk.
With a Commercial Umbrella insurance policy in place, your organization is better equipped to handle these unexpected situations without jeopardizing its financial stability.
Let’s take a closer look at reasons to invest in Commercial Umbrella insurance and what is excluded from this type of policy.
Reasons to Invest in an Umbrella Policy
Unfortunately, in today’s litigious society businesses face an ever-present risk of lawsuits and liability claims, which can lead to significant financial strain. A Commercial Umbrella insurance policy can provide the extra protection needed to safeguard your business from these potential risks. But what specific reasons would you invest in an umbrella policy?
Here are the top reasons businesses should consider adding a Commercial Umbrella policy and how it can benefit business operations:
General Liability Sometimes Isn’t Enough
For large losses, the underlying $1,000,000 limit on commercial General Liability insurance policies is sometimes just not enough to cover expenses associated with lawsuits or accidents that affect more than one individual or company.
In such cases, the costs can quickly escalate, potentially exhausting your primary liability coverage and leaving your business financially vulnerable. A Commercial Umbrella policy can step in to provide additional coverage beyond the limits of your General Liability policy, offering an added layer of financial protection.
Your Business Operates in a High-Risk Industry
Businesses operating in high-hazard industries, such as construction or contracting, can particularly benefit from a Commercial Umbrella insurance policy. These industries often face increased risks and are more likely to encounter accidents or legal disputes.
In some cases, excess limits are required to fulfill contractual obligations. A Commercial Umbrella policy can help meet these requirements while also providing extra protection tailored to the unique challenges faced by high-hazard industries.
Offers Excess Limits Over Other Types of Policies
One unique advantage of a Commercial Umbrella policy is its versatility. This policy may offer excess limits over General Liability, Auto Liability, Employers Liability (Workers’ Compensation), and other insurance policies.
You Operate a Fleet of Vehicles
For businesses that employ drivers or operate a fleet of vehicles, a Commercial Umbrella policy can provide valuable extra coverage over Auto Liability. Accidents involving company vehicles can result in costly damages, injuries, and more, leading to substantial financial consequences for your business.
Purchasing a Commercial Umbrella policy will provide excess layers of liability over the Auto Liability policy insuring your fleet.
Investing in a Commercial Umbrella insurance policy can offer numerous benefits to businesses across various industries. From providing additional coverage beyond the limits of underlying liability policies to offering tailored protection for high-hazard industries and covering multiple lines of insurance, a Commercial Umbrella policy can be an essential component of a comprehensive risk management strategy.
Common Exclusions from Commercial Umbrella Policies
It’s important to understand Commercial Umbrella policies do not cover every possible scenario. There are several common exclusions from Commercial Umbrella policies that businesses should be aware of when considering their insurance needs.
Here are the typical exclusions included in the Commercial Umbrella policy that you should be aware of: intentional acts or malicious behavior, contractual liability (assumed solely in a contract), and claims involving Pollution Liability, Professional Liability, or Employment Practices/Discrimination Liability (separate policies can be purchases to provide coverage for these types of claims).
Commercial Umbrella Insurance from Christian-Baker Company
At Christian-Baker Company, we understand the unique challenges faced by businesses of all sizes and across various industries. Our experienced team is committed to helping you navigate the intricacies of commercial insurance and ensuring that your organization has the right coverage in place to address its specific needs.
From assessing potential risks and identifying gaps in your existing insurance portfolio to tailoring a Commercial Umbrella policy that meets your requirements, we’re here to provide the guidance and support you need to make informed decisions about your business’s insurance coverage.
As a trusted partner in protecting your business, Christian-Baker Company takes pride in offering personalized service and a broad range of insurance products designed to meet the evolving needs of our clients. Our dedication to building lasting relationships based on trust, transparency, and a genuine understanding of our clients’ unique circumstances sets us apart in the industry.
If you’re considering purchasing a Commercial Umbrella insurance policy for your business or would like to explore other insurance options, we invite you to reach out to our team at Christian-Baker Company. With access to more than 50 carriers, we can find the best policy to meet the needs of your business. We’re more than happy to discuss your organization’s specific needs, answer any questions you may have, and provide tailored solutions that help protect your business’s assets, reputation, and future!
