A single lawsuit from a client could put your business in a position you cannot afford. That’s where general liability insurance can come in handy. However, it’s not a cure-all. Even the broadest liability insurance has its limits. Still, there are ways small business owners can expand traditional liability limits. One
of those ways is with commercial umbrella insurance.
Getting umbrella insurance provides extra protection where your liability policy cannot. While you hope never to use it, you might find it beneficial in the right circumstances.
Why Businesses Need Liability Insurance
Let’s say someone falls in your business and breaks a leg. They might have medical bills lost income and other hardships. They could sue, or request a settlement to help them afford these costs. You might run the risk of ruining your business trying to pay them back. Liability insurance can generally help cover the costs of harm you cause others. Still, in the wrong cases, it won’t cover all your losses. You’ll want to have a backup plan.
Umbrella Insurance Adds Liability Protection
Most general liability policies have limits around $1 million per occurrence and $2 million total. Still, there’s not a guarantee that a client’s losses will fall neatly into those limits.
If someone sues you for $250,000, your liability insurance will likely cover the costs. Still, what if an injured client sues you for $1.5 million in losses? Since you only have $1 million in coverage per occurrence, you could face a $500,000 hole in coverage. You might have to pay out of pocket. How can you avoid this potentially-ruinous cost.
Many businesses have the option to enroll in commercial umbrella insurance. This protection functions as an extra shield against damage. It can provide financial limits beyond those of your general liability coverage. Once your liability coverage pays its limits, umbrella policies can often cover the extra costs. So, if you have $1 million liability coverage for a $1.5 million claim, umbrella coverage can likely help pay that extra $500,000. It can also often pay for losses your general liability coverage might exclude.
So, if your business causes harm or property damage to someone else, you might have to pay them back. That’s a cost most businesses cannot afford. Don’t let yourself go without liability protection, and then some. Ask your agent at 888-296-0345 if you can benefit from umbrella coverage. They can help guide you through the selection process.
Also Read: Texas Workers Compensation for Small Businesses