“How does commercial umbrella insurance protect your business?” It’s a question we get a lot. It’s insurance that many people may not understand but are often glad they have when they need it.
If you own a business in Michigan, you may have several commercial general liability insurance policies. Unfortunately, lawsuits are all too common in this country. And your worries may go beyond making profits or retaining top talent.
Chances are that you may lose a lawsuit for a sum more than your existing insurance will cover. This will force you to pay for the extra amount out of pocket, and this could devastate your business.
This is where commercial umbrella insurance comes into the picture.
What Is Commercial Umbrella Insurance?
Umbrella insurance is a personal excess liability policy that provides an additional layer of coverage above your general liability, auto liability and workers’ compensation. You’ll use it if you’re liable for a claim that’s bigger than your underlying insurance. This could happen if your Michigan business loses a lawsuit whose costs are greater than what your commercial general liability can cover.
For example, your existing general liability insurance policy is worth provides $1 million of liability coverage, but if you lose a lawsuit from an accident an amount of $1.5 million is awarded to the other party. Commercial umbrella insurance will cater to the difference. This will save your business from the extra costs.
How Commercial Umbrella Insurance Protects Your Business
We live in a litigation-happy society. Anyone can sue you or your business for anything. Multi-million dollar lawsuits are common. The problem is that these penalties often carry amounts far greater than what your commercial general liability insurance policy covers.
Offsetting such losses may easily drive your Michigan business out of operation. However, with commercial umbrella insurance, your business may survive the lawsuit.
Here is how commercial umbrella insurance can protect your business:
1. Covers potential costs of claims that exceed your situations not covered by existing commercial insurance policies policy limits
If your employee is involved in an auto accident, causing bodily harm or death to a third party, your business could be sued for damages and compensation for the victims. The victims may sue your business for more liability, including medical bills, loss of income, and damage to their property. These costs may stack up, and go beyond the value of your existing auto insurance.
The auto insurance will pay the value of the policy, but that won’t be enough to offset the lawsuit. You will then need to get extra funds from your business to plug the deficit, but this could spell disaster for the well-being of your business. Commercial umbrella insurance steps in to help pay for the extra charges, saving your business from potential collapse.
2. Covers liability claims that exceed the aggregate limits of your commercial general liability insurance
Commercial general liability policies have aggregate limits – the maximum amounts they can cover when the insured risk occurs. While you may not easily exceed this limit, there’s no guarantee that you won’t. If a lawsuit is filed against your business, it may go beyond this limit. That’s because your unfortunate circumstance may be an opportunity for some people to try to milk your business.
It isn’t uncommon to find yourself in a situation where the lawsuit requires your business to pay more than your insurance covers. But your commercial umbrella policy will cover the balance. It will also prevent your business from undue financial distress likely to occur when you pay for the lawsuit out of pocket.
3. Provides coverage for other related costs
Your business may be sued for related damages, such as disability and libel, and these costs may not be covered by your underlying insurance policies. They can amount to thousands or even millions of dollars, which can wreck your business if you pay for them yourself. Commercial umbrella insurance can take care of such costs.
Autumn Insurance Offers Commercial Umbrella Insurance
Without commercial umbrella insurance, your business could be at risk of collapse in a litigious society ready to sue you for anything. But you can obtain umbrella insurance from Autumn, be on the safe side of things, and keep your business running. For more information, please contact us today.