A business umbrella policy, also often called excess liability insurance, adds another layer of protection to any of several other business policies a company may have, including general liability, employer’s liability and commercial auto. In very simple terms, a business umbrella policy will pay out when other insurance policy limits have been reached to extend your protection.
For example, you have one million in business liability coverage and a covered claim is settled for $1.4 million. Your general liability insurance would cover the first million. You business umbrella policy would pick up the additional amount. Without a business umbrella, you would have to pay the uncovered expenses out of pocket, leaving your business open to risk and your assets vulnerable.
A business umbrella policy is an easy way to increase the coverage of several policies while keeping your overall premiums down. An umbrella policy can also protect a business from gaps in existing coverage, possibly even exclusions written into the primary liability policy. One key point to remember is that business umbrella insurance will not extend coverage limits on an Errors and Omissions or Professional Liability policy unless it is specified in the contract.
Talk to one of our business insurance professionals to get an analysis of your current business insurance coverage, the types of claims made in your industry, and the possible award amounts given in a successful lawsuit. Overall, excess liability, also known as a business or commercial umbrella policy could be the key to preserving your company in the event of a serious claim against your business.