Business insurance policies are designed to protect you against claims that could financially devastate your business. However, there is a limit to how much a business insurance policy will pay. If the cost of paying for the claim turns out to be more than the policy states, you will be stuck covering the rest. This can result in serious consequences, such as your company going out of business and you having to declare bankruptcy. That is why many business owners will purchase Commercial Umbrella Insurance, which provides additional coverage beyond what is provided by your company’s business insurance policy.
Let’s say one of your employees gets into a car accident while driving on the job. They are very badly injured, and the medical costs, which include surgery, physical therapy, and medication, are through the roof. When you bought your business insurance policy, the insurance company only agreed to cover up to $100,000 in business liability. But, the cost of your employee’s medical attention costs well over $500,000. At this point, your current business liability insurance is not picking up nearly enough to keep you protected. Chances are you don’t have an extra $400,000 lying around. So, what do you do? Potentially, this could cause your business to shut down for good and put you into financial hell for the rest of your life. But, with commercial umbrella insurance included in your business policy, you will be protected.
Commercial umbrella insurance is designed to protect business owners from these kinds of situations. Whatever the cost is that your business liability insurance won’t cover will be covered by your commercial umbrella insurance. It is basically just insurance on top of insurance, to make sure that you are protected in the absolute worst case scenario. Commercial umbrella may bring up your monthly premiums, but it could also be the one thing that saves your company from going under.