Umbrella Policies
The liability policies purchased by the business may not address the complete liability insurance needs of all business owners. Some problems include:
• Every insurer has limits on the amount of insurance it is prepared to write. Requests for increased limits may also be denied when the insurer does not have the ability to write that amount or when it does not want to be exposed to such risk.
• Although exposures excluded in the basic policy form can often be covered by endorsement, if the excluded exposure is not identified at the time the application is made, or is introduced during the policy period, the insured will be left without coverage at the time of a claim.
An Umbrella Liability Policy can solve these problems by providing the insured with both additional limits and broader policy coverages.
How the Umbrella Policy Works
You probably own some form of general liability insurance to protect you in the event of a lawsuit due to negligence on your part. However, there may be situations where the limits of your Commercial General Liability, Commercial Auto and/or Professional Liability policy may not provide with adequate protection. A commercial umbrella can provide you and your business with additional liability protection.
A commercial umbrella policy will provide liability limits in excess of those on your liability policy(s). This provides you and your business with additional protection in the event of a catastrophic event that results in hundreds of thousands, or even millions of dollars being awarded to plaintiffs in a lawsuit as a result of your negligent act.
Commercial umbrella policies can be a good value because they provide much additional insurance protection for a relatively small premium. This is because umbrellas are considered secondary coverage, meaning that your primary policy's limits must first be exhausted before coverage takes effect.
*** For exact terms, definitions, limitations and extensions, please talk to your broker and refer to your final policy wording ***
