Key Reasons to Consider an Umbrella Policy for Your Business

umbrella insurance

Risk is inevitable for businesses in any sector. Theft, accidents, cybercrime, natural disasters, and liability issues can impact any company. Liability insurance is essential for protection. However, when a lawsuit or massive loss exceeds the policy’s limits, the business could face bankruptcy unless protected by an umbrella policy, which kicks in with additional funds once the base policy limits are reached. Here are the key reasons to consider umbrella insurance for your business.

Get Umbrella Policy Protection Beyond Underlying Policies

An umbrella insurance policy adds protection beyond that of underlying insurance policies. Additionally, the primary insurance policy provides the base coverage in an insurable event. The umbrella policy kicks in after the primary policy has reached its limits. Hence, here are some examples of base policies that may include umbrella coverage:

  • Commercial auto insurance
  • General liability insurance
  • Employers liability insurance
  • Pollution liability insurance

Protect Against Large Claims

Umbrella insurance provides additional protection against claims too large for a primary insurance policy to cover. It includes claims that base policies do not cover. Additionally, it also includes large claims that exceed the limits of base policies, as well as small claims that combine to max out the limit of underlying policies.

Save Money

An umbrella policy can help save money over the long term. It’s a smart business move to shop around for competitive rates on an umbrella policy that will provide long-term protection against unforeseen events with potentially devastating financial consequences.

Protect Against Lawsuits

Lawsuits have increased in frequency and cost over the last few years: the number of nuclear verdicts doubled between 2020 and 2022, while the median nuclear verdict increased from $21.5 million to $41.1 million. One large lawsuit that exceeds the limits of a company’s underlying liability policy could cause catastrophic financial damage to the business. An umbrella policy can protect the business’s assets in case of a loss in a nuclear verdict with damages beyond the underlying policy’s limits.

Protect Against Accidents

If your company includes transit from one business location to another, your business is open to additional risk of accidents. Any time an employee is on the road, there is potential for a collision that can rack up damages, mainly if the incident involves multiple vehicles, multiple passengers, or large-scale property damage. An umbrella policy provides financial protection toward medical expenses or lawsuit verdicts that go beyond the limits of the base liability policies.

Protect High Hazard Businesses

An umbrella policy provides much-needed coverage beyond the general liability policy for businesses with inherently high hazard levels, such as construction.

Provide Peace of Mind With an Umbrella Policy

Running a business carries great stress as business owners face multiple risks. With expensive lawsuits on the rise, company leaders have more to worry about than ever before. A quality umbrella insurance policy can help instill confidence to ensure the business survives a nuclear verdict with its assets intact, giving the business owner peace of mind.

About The Hilb Group

Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.