Small Business Consultant Insurance – Once the policy limits have been reached, commercial umbrella insurance provides additional coverage for liability claims related to general liability, commercial motor vehicle, or employer’s liability insurance.
Business owners who purchase commercial umbrella insurance typically need to fulfill contracts that require higher than normal policy limits.
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Commercial umbrella insurance offers extra liability coverage for the most expensive lawsuits. For example, if a covered lawsuit costs your general liability insurance policy, but you still owe money for compensation, business umbrella insurance can provide additional resources to make up the difference.
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Commercial umbrella insurance can add coverage to (or all of) these policies. However, before you can purchase umbrella liability insurance, insurers require you to take out certain coverages in your basic policy.
Commercial umbrella policies have the same requirements and cover the same risks as basic business insurance.
Adding commercial umbrella insurance (or excess liability insurance) to your general liability insurance can cover legal expenses if someone is injured on your business property.
Adding commercial umbrella insurance to your general liability policy will help pay legal bills for damaged or destroyed third-party property.
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Adding commercial umbrella coverage to your commercial auto insurance policy or rental and non-owned auto insurance will help cover costs if someone files a lawsuit for damages caused to your vehicle.
When you add commercial umbrella insurance to your employer’s liability insurance (usually included in workers’ compensation insurance), it helps pay for employee lawsuits related to workplace injuries.
Commercial umbrella insurance costs about $40 per month for every $1 million of additional coverage. Many factors affect the cost of an umbrella policy, including:
Consider commercial umbrella insurance as a safety net. Another liability policy is your first line of defense. If you need an additional layer of protection in the event of a claim that exceeds the primary policy limits, business umbrella insurance will pick up the slack.
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For example, you have a commercial general liability policy with a limit of $2 million per occurrence, which means you can pay up to $2 million in legal fees.
If a customer suffers a serious injury after tripping and falls in the business and a protracted legal battle ensues, medical expenses, legal fees and damages can reach $2.5 million. After reaching the general liability limit, you are left with a $500,000 bill.
An umbrella liability policy can help cover expenses that exceed the basic policy limits. In the case above, a business umbrella policy can cover an additional $500,000.
Commercial umbrella insurance can provide extra financial protection if your business exceeds other coverage. Learn how this policy works.
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Commercial umbrella insurance used to be a policy that only large companies bought. Today, more small businesses are investing in commercial umbrella insurance because of the rising cost of lawsuits.
For example, if a general contractor is bidding on a project and the client’s contract requires a general liability policy with a limit of $5 million per occurrence, the contractor’s current $2 million general liability policy will be supplemented by a $3 million umbrella policy.
For example, if a customer trips on uneven stairs in your restaurant and sustains a serious injury that causes chronic health problems, they may decide to sue for $3 million in damages to cover their medical expenses.
If your restaurant’s general liability policy has a limit of $2 million per occurrence, the umbrella policy will cover damages over the initial $2 million, up to the limit of the umbrella policy.
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Businesses with a fleet of vehicles may need coverage to protect against accumulated costs from minor vehicle accidents.
For example, if a glass worker driving a company van to a job site accidentally causes a pileup, the other driver may decide to file a lawsuit for damages.
An umbrella liability policy can cover legal defense costs for your window installation business after your auto policy has been exhausted. It also covers compensation paid to other drivers in the form of settlements or lawsuits.
The more dangerous the job, the greater the risk of worker injury – especially in industries such as construction or installation.
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For example, a longtime employee of an HVAC installation company sued his employer for a chronic back injury from lifting heavy equipment.
The umbrella liability coverage added to your employer’s liability insurance protects against these types of employee claims and can cover the cost of hiring an attorney or any resulting settlement costs after the base policy limits have been reached.
While umbrella insurance exceeds the coverage limits for many policies, it does not provide all the protection a small business needs.
Umbrella liability insurance is inactive until the base policy reaches its limit. And like all policies, it does not provide coverage beyond the policy limits itself.
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The commercial property insurance portion of a business owner’s policy (BOP) or commercial package policy (CPP) can help pay for repair or replacement costs if business property is damaged by fire, theft or a covered weather event. Business umbrella insurance can only be added to liability insurance, not property insurance.
Professional liability insurance, also known as errors and omissions (E&O) or malpractice insurance, can cover lawsuits due to professional mistakes, including services not performed and deadlines missed.
You can increase the limits of this policy with excess liability insurance, also known as excess E&O, which is similar to umbrella insurance.
Commercial crime insurance, a type of loyalty insurance, will be needed to financially protect your business from crimes committed by employees against clients or customers.
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Unlike insurance, the policy reimburses compensation only up to the coverage purchased. Umbrella insurance cannot be issued to provide cover beyond this limit.
Before taking out commercial umbrella insurance, it’s important to find a basic insurance policy that fits your small business needs.
Businesses typically purchase umbrella obligations to fulfill contracts that require limits of more than $2 million. Contracts of up to $5 million are not uncommon. In this case, an umbrella policy with a $3 million limit would be added to a policy with a $2 million limit to meet the requirement.
Otherwise, the amount depends on the needs of the industry and business. For example, you may want more coverage to protect construction crews.
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The terms commercial umbrella insurance and excess liability insurance can be used interchangeably, but they are not the same thing.
Excess liability insurance provides additional coverage to only one type of business liability insurance, usually general liability or errors and omissions (E&O).
Commercial umbrella insurance provides several liability insurance policies if claims against your business exceed the limits.
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The type of business insurance you need depends on the risks of your business, as well as factors such as state laws, lease terms, and customer contracts.
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This policy covers general business risks, including bodily injury, damage to customer property, and injury caused by advertising. Required for most commercial leases.
BOP combines commercial property insurance and general liability insurance in one package. This is one of the most expensive commercial insurance policies.
This policy, also known as errors and omissions (E&O) insurance, can help cover legal costs if a business is sued for unsatisfactory work.
E&O, sometimes called professional indemnity insurance, is common for professional services. You can cover the legal costs of work-related lawsuits.
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This policy is required in almost all states for businesses that employ employees. It also protects the self-employed from workplace accident expenses that may be denied by health insurance.
This policy covers the value of the physical structure and contents of the business, such as stock, equipment and furniture.
This policy helps businesses survive data breaches and cyber attacks by paying for recovery costs and related expenses.
This policy is usually required for business-owned vehicles. It helps cover costs from vehicle accidents, theft or vandalism.
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This policy provides additional coverage when other policy limits are reached. Increase existing general liability insurance and other liability insurance coverage.
These business insurance policies cover risks in certain industries such as retail, manufacturing, health care, food and beverage, and construction.
In general liability, this policy applies to injury or property damage caused by products or services performed. Also called finished product operation