The name says it all. A Commercial Umbrella is there to protect your business against the rainiest days. The main and truly sole purpose of a commercial umbrella is to cover any claims against you once when your general liability, workers compensation or commercial auto are maxed out. A standard work comp and commercial auto carry a max aggregate limit of $1 million dollars. Typically General Liability polices have an aggregate limit of $2 million dollars. This means any claim exceeding those limits is coming out of your pocket. Protect Your Business!
Why Do You Need Umbrella Policy?
So you have ran a successful business and maybe you have never incurred a claim, what is the need for an umbrella? One word, Lawsuit! Let us be practical, lawsuits are expensive and messy. Most importantly they can drag on for years. This means the chances of a nice clean payout on a claim are thrown out the window. Speaking to that point, the same goes for medical bills. Medical bills can certainly rack up in a hurry. Until a claim is closed by the adjuster, your insurance is picking up the tab. Once the aggregate limit is exceeded, you are on the hook. Having an Umbrella greatly reduces the chance your business will ever have to pay out of pocket.
How Can Umbrella Pocily Imrpove You Business?
We now know the financial implications an umbrella provides. What other ways can an umbrella help your business? Bidding! Big companies and corporations not only love Umbrella Policies, they are starting to make it a requirement. Big companies have a lot to lose by paying out of pocket. If they are hiring you, they are 100% going to make sure their best interest are protected. When you are bidding on big projects, stand out from your competition. Have the coverage you know they are looking for and stand apart from other bidders. It’s a smart business move and lets those companies you work with know you are committed to having the best coverage.
What’s The Difference Between Umbrella and Excess Policy?
How does an Umbrella differ from an “Excess Policy”? An Excess Policy is restricted by a term called “follow form.” This creates several restrictions and carriers strict limits as to what is paid out during a claim. An Umbrella is much broader and can even pay out dollar one if the underlying polices exclude something you thought was covered. Not only is it a smarter business move to carry an umbrella over an excess policy, the cost are very similar.