What is Commercial Umbrella Insurance?

When we work with our clients, we like to put together comprehensive risk coverage plans that protect against as many potential issues as possible. If we miss something and it turns out to become a problem, then our customer could go out of business because of our mistake. Because of our significant responsibility to our clients, we like to use tools that go above and beyond the protection needed in certain situations.

One of the products we use to protect our clients is commercial umbrella insurance. While we talk about umbrella coverage a lot, we should spend more time explaining what it is to help our readers understand what we are talking about. Today we explain what commercial umbrella insurance is and why you might need it.

What is Commercial Umbrella Coverage?

Commercial umbrella coverage extends the limits of the liability coverage in any basic commercial business insurance policy. The term “umbrella” is used because the coverage is supposed to be conveniently placed over the other coverages and neatly extend the limits, but some polices offer exclusions on their umbrella coverage. You should always ask your risk expert about any of the potential limitations of umbrella coverage before buying it.

What does it Cover?

If your business gets sued for something and the resulting award exceeds the limits of your existing liability insurance, then umbrella coverage kicks in to pick up the rest of the bill. This can apply to injuries customers incur while in your store, or covering the costs of a marketing mistake that would up creating a lot of financial problems.

Many business owners fail to realize how costly marketing errors can be until they are forced to deal with one in a lawsuit. For example, if you have the wrong price printed for a product and it causes a rush on that product in your store, you can expect lawsuits after the dust has settled.

Why do I need it?

When you set up your initial liability coverage in your commercial insurance, there are going to be areas that stick out as being potentially damaging. For example, if you ship precious gems or other expensive cargo, then you might not have enough liability insurance to realistically cover all of your losses.

As risk mitigation experts, we will dive deep into your business operations and determine every possible way that your company is exposed to risk and then find the areas where risk can be enhanced. While umbrella coverage is there to extend all your liability limits, there will be certain limits we will have in mind when putting your policy together.

The standard liability coverage that comes with commercial insurance is designed to protect clients in the course of normal operations. But if your company engages in activities that tend to increase the potential for large liability claims, then you can protect your business by adding commercial umbrella coverage. With umbrella insurance, you will have the extra protection you need to avoid financial collapse in the event of a client lawsuit.