Becoming a business owner is a great accomplishment. Staying a successful business owner needs proper protection. Not knowing what could happen as your business progresses is inevitable however, having precautions in place to avoid financial loss is good business sense.
Protecting your business by having a business umbrella policy is a great place to start. Your independent insurance agent can walk you through a selection of coverage options, so you can make an educated decision.
What Is Business Umbrella Insurance?
Business umbrella insurance is an extension of your general liability or business owners insurance policy. Providing your business with additional liability coverage above and beyond your underlying liability policy in the event, your limits get exhausted.
How Is Business Umbrella Insurance Different from Regular Business Insurance?
Your business should have a general liability or business owner's policy in place to start with. If you have company vehicles, titled in the business name then you should also have a business auto policy. Those are the basic policies that a business umbrella policy would go over.
Business umbrella insurance provides additional coverage to all the underlying policies that you hold for extra protection. The excess insurance can be anywhere from one million to several million dollars.
When your benefits get exhausted by a large claim on your underlying policies, then business umbrella coverage will start. Some business umbrella policies have a deductible that would need to be met prior to coverage starting.
Is Business Umbrella Insurance Necessary?
For some companies, business umbrella insurance is mandatory. For example, the federal government requires businesses such as oil companies to have umbrella policies. For the general business owner, business umbrella insurance may not be required unless a contract, client or landlord requests it.
However, even if business umbrella insurance is not mandatory, it is a necessary coverage to obtain for your operation. Without coverage it's likely your business would suffer extreme financial loss.
Why You Need Business Umbrella Insurance
Getting sued can happen to any business at any time. The most expensive part of a lawsuit is paying the lawyers to defend you. No matter if the lawsuit is legitimate, your business has to respond.
Lawsuits can be drawn out over several years. In the event you don’t end up paying out to the plaintiff, you may still be responsible for hundreds of thousands of dollars in legal expenses.
What Does Business Umbrella Insurance Cover?
A business umbrella policy will provide additional liability insurance above and beyond your underlying liability insurance policies. Coverage will start once your underlying coverage limits have been met.
For example: If your company has delivery trucks, then you will have a commercial auto policy that most likely has a limit of a million dollars. Your umbrella policy would provide an additional million dollars above your auto policy that would start once the auto policy limits have been exhausted.
How Much Does Business Umbrella Insurance Cost?
The cost of business umbrella insurance depends on the type of business and a variety of other factors like size, materials used, and how you run your operations. For a less risky, smaller business the business umbrella premiums can be as low as $500 annually.
If your business is larger with more exposures and inherent risk, then you will likely need more business umbrella coverage and premiums can be in the thousands annually.
The Benefits Of Working With an Independent Insurance Agent
Independent insurance agents write around 80% of commercial insurance and are knowledgable in the various lines of coverage needed for your business. Agents have the ability to shop and compare policies from multiple carriers to find the best fit for your particular business and situation at the most competitive price.
What’s the Best Way to Compare Business Insurance Quotes?
Your independent insurance agent will review your needs and help you evaluate the business umbrella insurance coverage that makes the most sense. They’ll also compare policies and quotes from multiple insurance companies to make sure you have the right protection in place.
Independent insurance agents know how to navigate business insurance and can save you not only time but money.