The old adage it never rains but it pours seems particularly fitting when assessing your small business umbrella liability insurance. Recognizing that one size never fits all, umbrella liability insurance provides small business with an extra layer of coverage over and above standard liability policies. In addition, the International Risk Management Institute (IRMI) notes that small business umbrella liability coverage:
“Provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims, it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims, and it provides protection against some claims not covered by the underlying policies, subject to the assumption by the named insured of a self-insured retention – IRMI
Designed to protect your assets by kicking in when your primary commercial general liability coverage is exhausted, small business umbrella liability insurance is designed to fill coverage gaps. The addition of umbrella liability insurance or excess liability is much like adding another brick to your insurance foundation. Each brick is a layer of protection that is triggered should the limit in the underlying policy be used up.
All too often, jury awards and out-of-court settlements run into millions of dollars after a worst-case scenario happens. Should your small business be found legally responsible for injuring someone or damaging their property, without umbrella liability insurance, anything beyond the limits of your standard commercial general liability insurance will come out of your bottom line.
When selecting a limit for your small business umbrella liability insurance, take time to consider:
Additional umbrella liability insurance can be relatively inexpensive when compared to the added peace-of-mind and coverage your small business will gain.
It is notable that the cost for each million dollars of small business umbrella liability insurance coverage decreases with every million dollars of coverage purchased.
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