DOES MY BUSINESS NEED AN UMBRELLA POLICY?
Photo by Christian Walker on Unsplash
As a business owner, the thought of a lawsuit inducing catastrophe may keep you up at night. Accidents happen regardless of the meticulous care that is demonstrated on daily business activities, and it’s in the moments of disaster that insurance goes from being thought of as a necessary evil to a blessing in disguise.
I know you may already have liability insurance and so you feel a sense of comfort and protection. But if it’s comfort that a general liability policy provides through its coverage, then think of Umbrella Insurance as the down duvet… rest easy my friend.
WHAT IS COMMERCIAL UMBRELLA INSURANCE?
Umbrella Insurance is commonly referred to as excess liability and it provides an additional layer of coverage over your current business auto liability and general liability insurance. The umbrella is designed to provide protection against major claims and lawsuits against your business. There are three main areas where the umbrella insurance is needed.
Umbrella Policies Provide Coverage for Major Claim Occurrences and Lawsuits
When major claims occur, lawsuits are soon to follow. The cost of significant damages coupled with the mounting costs of litigation usually spells serious financial trouble for companies and business owners. In these cases, a $1Million liability occurrence limit can be quickly reached as legal fees accrue. With an umbrella policy or excess liability limit, the coverage kicks in for you when the underlying liability policy limit is reached.
Umbrella Policies Provide Coverage when the Underlying Aggregate Limit is Exceeded
It’s not only major claims or lawsuits that exceed the underlying liability insurance limit. Sometimes trouble comes in bunches. If this unfortunate situation becomes a reality for you, the general aggregate liability limit on your policy can be easily exceeded by compounding claims. The aggregate liability limit is the amount of money that the insurance company will pay out to on your behalf over the course of the policy period. If you happen to have multiple claims in one year, they can easily surpass a $1million aggregate limit and leave your business on the hook for the remainder of the indemnity.
Umbrella Insurance Can Provide Drop Down Coverage
Another common advantage of an umbrella insurance policy is the “drop down coverage” clause. If your policy has the drop-down clause it will effectively drop down to provide protection in cases where the underlying liability policy has reduced limits or gaps in coverage. This is an added value of the umbrella insurance that gives peace of mind to business owners.
For more information regarding commercial umbrella insurance, it is important to speak with a licensed Insurance agent. Reach out to a Moore Resources agent to further discuss your options and ensure that personal injury coverage is extended to your homeowners’ or renter’s insurance policy.
Moore Resources is an Independent Insurance Agency located in St. Petersburg, FL and offering Homeowners Insurance, Auto Insurance, Personal Insurance and Business Insurance. Our reach extends beyond the Tampa Bay area to the entire state of Florida. Moore Resources has regionally been dedicated to serving the local residents of Pinellas, Hillsborough, Polk, Pasco, Manatee and Sarasota counties; including St. Pete, Tampa, Clearwater, Bradenton, Brandon, Dunedin, Gulfport, Lakeland, Largo, Lutz, Palm Harbor, Pinellas Park, Riverview, Ruskin, Seffner, Seminole, Temple Terrace, Tierra Verde, Town n Country, and the Gulf Coast Beaches.
The purpose of this blog is to present general information only. It does not interpret specific policies or coverage. In order to obtain detailed information regarding your insurance, contact a licensed insurance agent.
