What is Business Umbrella Coverage and Does Your Business Really Need One?
As a business owner, there’s no doubt you have worked diligently to build up your business, putting in countless time and energy to create something you’re proud of. Unfortunately, all it takes is one liability claim, and your business could be shut down for good – undoing all you’ve accomplished and putting your entire livelihood in jeopardy.
According to the Hanover Insurance Group, nearly 80 percent of businesses lack coverage against potentially ending lawsuits and catastrophic losses. Are you one of those businesses? If you don’t already have business umbrella coverage for your business, you may be at risk for high-dollar payouts that can leave you bankrupt. Business umbrella coverage provides you with extra protection – above and beyond your GL policy – that can be tapped into for big, unexpected events that quickly exceed your primary insurance limits. These unexpected events can cost your business millions of dollars out of pocket if you’re not properly covered. The reality is, when it comes to protecting your business, business umbrella coverage is a necessity – not a luxury.
What Does Business Umbrella Coverage Cost?
As a supplemental policy, business umbrella coverage is surprisingly affordable because it relies on the limits of your underlying policy to be used up first. This means you can keep your premiums down while still having sufficient coverage. It’s this “layering” that makes it especially important for business owners: it can give you access to higher limits of protection from risks at an affordable rate. Another benefit of business umbrella insurance is that it carries no deductible when it kicks in after your other limits have been exhausted. This means extra coverage for you without any additional out-of-pocket expenses.
As a suggestion, for most small businesses, business umbrella coverage protects at least a $5 million umbrella policy, while medium to large and high-risk business umbrella insurance costs run significantly higher. Why? Let’s say a customer falls on an icy walkway you have failed to clear. Then that client suffers from a traumatic brain injury, is out of work for a while and now needs to relocate across the country because of their inability to provide for their family. In court, the judge awards this plaintiff $2.8 million in damages. A loss of this size is not uncommon, and for many businesses, having multi-million-dollar business umbrella coverage is well worth the protection is provides. In addition, most polices come with unlimited legal defense, which will provide the business with attorneys who are experienced in settling similar cases.
Smart business owners practice risk management because they know things like this happen. By including an umbrella coverage on their policy, they ensure that they can run their businesses with minimal disruption. While this added umbrella coverage for your business is not very expensive, the cost of not having it for a given claim is huge. Also, it is almost impossible to sell a business that is in the middle of a pending legal incident.
While liability is simply a factor of doing business, do yourself a favor and give yourself greater peace of mind by talking to us today about what umbrella coverage options might be right for your business.