Many Orlando business owners have misconceptions about commercial umbrella insurance policies ad the role they play in risk management. When properly secured through Orlando insurance agencies, umbrella policies provide necessary additional coverage extension to an operation’s primarily insurance policies. This coverage is structured such that it is an addition to an already existing policy, as such your operation should have already purchased primary insurance coverage before seeking out an umbrella policy. These policies kick in whenever a business’s primary insurance is exhausted by a loss or when the primary policy contains an exclusion that is not also excluded under the terms of the umbrella policy.
Umbrella policies can be tricky to understand, but here are a few pros and cons of this additional coverage:
- Highly Flexible: Many of Orlando commercial umbrella insurance provisions are negotiable with most underwriters, which means that your insurance agent will have a large amount of flexibility when negotiating the terms of the policy for your business. This ensures that you as the policy holder are able to secure the exact coverage your operation needs without paying for extra coverage you don’t.
- May Require Minimum Underlying Coverage Limits: Because these policies are supplemental, insurers will often specify set limits of underlying coverage that a policyholder must secure. It is not uncommon for insurers to require that business owners seeking umbrella coverage attain limits as high as $1 million, however such stipulations will depend on the insurer and how the umbrella policy is written.
- Claim Defense: According to experts, many umbrella liability contracts have provisions that protect the right of the insurer to take over or participate in the defense of a claim that may involve the umbrella policy. According to the Commercial General Liability Coverage Guide, these policies often include defense coverage for uninsured exposures and even when the loss doesn’t appear likely to involve the umbrella contract.
- Extends Coverage for Additional Insureds: One great benefit of orlando commercial umbrella coverage is that any additional insured named in the underlying policy is automatically included in the umbrella coverage. While the coverage is not any broader than the coverage provided by the underlying insurance policy, the limits should increase. However, when working with any policy that involves multiple named insured parties, its best to work closely with your insurance agent to make sure all parties have the coverage needed.
- There are limitations: Commercial Liability Umbrella policies often exclude or are not available for certain exposures and risks. Common exclusions include: liquor liability, workers compensation, employers liability, and employment-related practices, pollution, aircraft or watercraft, and racing activities, recall of products, work or impaired property, and cyber liability.
At Newman Crane, we understand the common and nuanced risks that Orlando business owners face. That’s why we proudly offer a complete suite of Orlando business insurance solutions to help business owners navigate the hazards of operation. We can help ensure that your operation is protected from many common and specialty claims and liability exposures, including Commercial Umbrella Insurance. Give our Orlando business insurance specialists a call today at (407) 859-3691 to learn more about all our offerings and the specialty industries we serve.