Commercial Umbrella Insurance

Buying individual liability insurance policies is a simple way to secure the business from risks like commercial auto liability claims, accidents to employees or outsiders in business premises, injury resulting from use of your product or service, damage to other’s property, etc.

However, most businesses face the risk of underinsurance, especially with respect to liability, because assessing the value of liability claims that may arise in disputes in the future is next to impossible. Opting for high coverage for each type of liability insurance would be an extremely expensive strategy.

The ideal solution to this conundrum is to opt for commercial umbrella policy insurance cover, which solves the problem of underinsurance without resulting in an unnecessary waste of precious capital.

Features of Commercial Umbrella Policy Insurance

The commercial umbrella policy insurance cover is designed as an enhancement to conventional liability plans. The features of this policy include:

  • The policy’s coverage can be utilized only after limits of other liability plans have been exceeded. If you have a $1 million CGL policy, then the umbrella plan will step in only in cases where claim amount exceeds $1 million. This is why the Umbrella policy is considered as an ideal backup option to minimize risk of underinsurance.
  • Nature of coverage is broader than conventional liability plans. A commercial auto liability plan is applicable only to claims arising out of auto accidents involving vehicles owned or leased by the company. This cover won’t help your company pay for personal injury not arising out of an automobile mishap. The umbrella policy applies to virtually all risks that can result in a liability claim on the company.
  • The commercial umbrella policy often covers risks normally excluded from conventional liability plans. The policy may cover cases like damages arising out of own product or service, where you assume liability in a contract, cost of a recall of faulty products, etc. Unlike specialized plans, the number and extent of the risks covered can be customized to suit the unique requirements of your business.

Advantages of Commercial Umbrella Policy Insurance

The umbrella policy allows you to strike the right balance between comprehensive protection and affordable premiums. Buying $100 million coverage for all types of liability risks may offer complete protection. However, you may end up spending all your profits on premiums alone. This coverage lets you cover a wide range of liability risks under a single plan at a relatively affordable premium.

Value for money aside, umbrella policy insurance will protect your business from new risks that may unexpectedly arise in a rapidly-growing business. Managing a product recall may not be a complicated issue for a small company operating in just one or two cities.

However, the rapid expansion of business to all major cities of may require a state-wide recall of a faulty product. Instead of buying expensive specialized coverage, you can opt for nominal protection and back it up with umbrella coverage.

The commercial umbrella policy insurance fulfills the most important function of insurance—risk control. With such coverage in your hand, you can operate your business without fear of losing it all due to a single mistake or a single claim. You can also customize the plan to include indemnity to your business in case of excessive losses due to fire, theft, or other risks that don’t strictly fall within the ambit of liability insurance.

If you wish to acquire real protection from liability claims for your business, contact us for more information about selecting the right umbrella policy with the right amount of coverage for virtually all risks affecting your business.

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