Umbrella Insurance for Your Business and Peace of Mind

In a culture where litigation is commonplace, business owners have many more worries than making profits and retaining top employees. If your product injures a consumer, your organization could face a devastating lawsuit, exponential damages and a tainted reputation in the marketplace. To assist with the financial burden of a claim, many business owners purchase commercial umbrella insurance on top of their standard commercial general liability (CGL) insurance policies.

Most CGL policies have an aggregate limit that, once exhausted, will not cover any other excess claims. Lawsuits frequently impose multimillion-dollar penalties on businesses — far outside the coverage provided by most CGL policies. As a result, common losses such as vehicle accidents, employment claims and hazardous substance spills can pose a serious financial threat.

Businesses are also liable for the health and safety of their employees and for their employees' behavior. For instance, your business could be held liable after your holiday party results in property damage to a rented banquet hall, or if your business office has a carbon monoxide leak that causes employees to get extremely ill.

Purpose of Umbrella Coverage

Umbrella coverage is designed to protect an organization against monumental liability claims. Typically, an umbrella policy serves the following purposes:

• Provides coverage for potential damages and court defense fees that exceed underlying insurance policies (typically CGL policies)
• Provides coverage in situations not covered by underlying policies but not excluded from the umbrella policy, subject to a self-insured retention (SIR)
• Applies to claims where the aggregate limit of the underlying policy has been met — the umbrella covers the remaining portion

Coverage Details

A typical umbrella policy offers coverage for worldwide personal injury, blanket contractual liability protection, care/custody/control, non-owned aircraft liability, watercraft liability, advertisers liability, liquor law liability, and explosion/collapse/underground (XCU) liability.

Policies follow form, meaning they abide by similar provisions and cover similar losses as the underlying policy. The insurer has the right to investigate all claims not covered by any underlying insurance.

To learn more about averting your business risks with commercial umbrella insurance, contact Insurance Plus LLC today.