Why Is Umbrella Insurance Worth Getting?

Do you have general liability insurance? You might think that with your current insurance policy, you’re all set. But if you’re hit with a claim that’s more expensive than you expected, you could find yourself and your business floundering. For cases like these, you’ll want to consider having commercial umbrella insurance.

Why Is Commercial Umbrella Insurance Worth Getting?

If you own a business, it’s important to make sure that you’re keeping it and yourself safe. Having the right insurance will do that. However, not all insurance policies will cover every potential liability. You should always make sure to read through your policy and understand what you are and are not covered for.

You should also consider purchasing commercial umbrella insurance, which is a great way to keep yourself and your business safe. Umbrella insurance will cover additional potential costs that your current insurance policy may not. It can also take over any costs if your other liability coverage limits have already been fully reached.

What Is Umbrella Insurance?

This type of insurance will add another layer of coverage that you can use when your other coverage has reached its limits. While you may not expect to need to cover anything beyond these policies, the unexpected can still happen.

For example, if a client comes to your workplace and slips and falls, then you could be asked to pay a large sum of money. Your existing policy may only cover a portion of that policy. At that point, your umbrella insurance would kick in, providing coverage for the rest of the payments required.

What Does Umbrella Insurance Cover?

Umbrella insurance will cover the same types of costs that business liability insurance covers. It will also cover and medical or legal fees that you might be responsible for. When you get umbrella insurance, you’ll receive coverage for the following areas.

Product Liability

You might make a product that you’re proud of, but sometimes things go wrong. It’s important to take product liability seriously, especially since as a business you are responsible for the products you import, produce, or manufacture.

This type of insurance will cover you in case your products cause injury to a customer or damage their property. Umbrella insurance will take over the costs in case your product liability insurance coverage runs out.

Bodily Injury Liability

Even businesses that run the tightest of ships can have accidents. If there has been an accident and your business operations are what caused it, then anyone who receives a bodily injury from this accident might seek out compensation that you could be ordered to pay.

General business liability coverage will help you cover the costs of court fees and the compensation that you owe the other party. But if your current policy doesn’t provide enough to cover the full cost of damages, then you’ll be glad you got umbrella insurance.

Advertising Injury

Things like slander and libel are taken very seriously in the courts, and you could find yourself in some trouble if you’re accused of doing these things, even unwittingly. If you’re accused of false advertising, libel, or slander, then you could find yourself facing some hefty fees.

When you get general liability insurance, you will be covered for these fines. You’re also going to want to think about purchasing umbrella insurance to cover you in case you and your business run into a claim that your general liability insurance policy isn’t able to fully cover.

Tenant Liability

If your business requires that you rent out a space, then you’re responsible for making sure that that space is kept clean and in good condition. If you don’t do this, or something goes wrong that causes property damage, then you are liable for these damages and for covering any costs the damage might incur.

Again, having general liability coverage will help you ensure that these costs are covered if they ever arise. But if you’re hit with a claim that’s bigger than you expected, then an umbrella insurance policy will make sure that you’re still covered.

Who Should Get Umbrella Insurance?

Any and all businesses should consider getting umbrella insurance. While you may not believe your business can be hit with particularly heavy claims or fines, there’s always the possibility that it could happen.

With that said, there are some types of businesses that should have umbrella insurance because they are at higher risk for large claims than other businesses. If you and your business are in any of the following categories, it’s important that you consider getting umbrella insurance.

You Work on Other People’s Property

As soon as you work or perform tasks on other people’s property, you are opening yourself up to greater risk. Property damage can result in expensive claims, so it’s important to keep yourself and your business safe if they ever arise.

One example of this is if you are a construction worker and you are helping with a renovation on someone’s personal property. Mistakes and accidents happen, and if your operations cause damage to the property owner’s personal property, you could be hit with a big lawsuit. Umbrella insurance will offer you the protection you need.

Your Commercial Property Is Open to the Public

Allowing the public to enter your commercial property opens you up to the risk of someone getting hurt. And if someone gets hurt on your property and it’s ruled that you are responsible, you might find yourself facing millions of dollars in fines.

For example, you might own a store, and someone slips and falls on a patch of wet floor where there is no sign. In this case, it could be ruled that your business is responsible for covering any medical expenses or missed wages that that person experienced because of the accident. Umbrella insurance will help cover these costs.

You Are Contractually Obligated to Have Umbrella Insurance

It’s a good idea for all businesses to at the very least consider getting umbrella insurance. But there are plenty of cases where having this type of insurance will be required.

Many government contracts, for example, will require that you and your business have umbrella insurance. It’s very common for government contracts especially to have these types of requirements. However, any customer might require that you have umbrella insurance since it protects both you and them in the event that something happens.

Your Business Is at High Risk of a Lawsuit

While some businesses may be at higher risk of lawsuits than others, the reality is that all businesses carry significant risks. So, essentially, if you own a business, you should have umbrella insurance to protect yourself.

Businesses like sole proprietorships, home-based businesses, and businesses with no employees, subcontractors, or direct contact with clients may be able to get away without it. That said, it’s still something you’re going to want to consider. Even these types of businesses can get hit with massive claims that their general insurance policy might not cover.

Other Types of Insurance to Consider

Getting umbrella insurance will do a lot to protect yourself and your company in the case a large claim is thrown at you. But there may be some other types of insurance you’d like to consider purchasing as well.

Along with general liability insurance and umbrella insurance, consider adding any of these types of insurance to your policy.

Business Auto Insurance

If your business requires that you drive a vehicle, then this is one type of insurance that you are going to want to purchase. Driving any type of vehicle puts you and your business at risk. Whether you’re driving a delivery van or a small forklift in a warehouse, auto insurance is crucial for keeping yourself and your business safe.

When you get auto insurance, you’ll be covered for any damages or liability if you’ve been in an accident. This kind of insurance will cover any personal injury as well as property damage that may have been incurred.

Cyber Liability Insurance

These days, the internet is an important part of any business. But being online can pose some surprising risks. You could experience a cyber attack, which will seriously affect your business.

Getting cyber liability insurance will help cover any costs associated with data breaches that your business experiences.

Office Risk Insurance

There are all kinds of things that can happen in an office that might cause harm to another party. For instance, one of your employees could get hurt in your office, or a customer or client visiting could injure themselves.

There are also a lot of assets in your office that might be worth more than you anticipated. Getting office risk insurance will help keep you safe if these assets are damaged or if other property or people are harmed in your office.

All businesses should have insurance, but your general liability insurance might not cover you for every possibility. In these cases, you’ll want to make sure that you have commercial umbrella insurance. Get in touch with us at Armac Insurance Services to learn more. 

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