Commercial Umbrella Insurance Pays For What Some Policies Do Not

Commercial enterprises have a wide range of potential risks for which they carry general liability insurance along with other types of commercial property insurance coverage, such as premises coverage. But even the most comprehensive of commercial property insurance and liability insurance plans have their limitations and coverage limits. And if something very bad happened, such as flood that causes a great deal of damage and disrupts business for a long time, a poorly protected business likely would be wiped out.

But a commercial umbrella insurance policy can be the answer to protecting a business and its assets as well as keep workers employed when something tragic happens. Such an insurance plan adds an additional level of protection to several commercial insurance plans. Among insurance plans for which protection could be added is general liability, which protects a business against the legal costs of injuries to people or damages to their property. With additional protection, coverage limits can be much higher than on the standard commercial insurance plan.

Other coverages that can have added protections include employers liability, which can protect a business against the decisions and actions of job providers, including potential damages from hiring and firing practices that might lead to lawsuits and other potential cost-inducing damages. Additional protection also might be available for hired and non-owned auto liability plans, which help pay the additional costs of potential liability arising from accidents while using rented, hired and non-owned vehicles for commercial purposes, whether it is renting a car while in a business trip, renting a van to move merchandise from one location to another or simply taking a cab to the hotel while on business.

When the cost of liability is more than standard insurance coverages provide, a commercial umbrella insurance plan can cover the remaining financial liability. For example, if a standard commercial liability protection plan gives up to $1 million in coverage but a liability claim amount is $1.5 million, the additional amount would be covered with the additional broad coverage. And when high policy limits are needed, such a broad range of insurance coverage with additional liability ceilings is a good solution that can be had at an affordable rate.

Commercial umbrella insurance plans can be the most affordable way to get high coverage limits for commercial enterprises, but they do not give additional coverage on errors and omissions or professional liability coverages to avoid the obvious potential for corruption and fraud. Commercial enterprises, whether small or large, can benefit from the additional protection to help pay the costs of legal settlements and other liabilities that easily can exceed standard business insurance plans and their liability limits. Instead of opting to pay a higher rate to boost the coverage limits on each individual plan, the broader range provided by the extended liability coverage plans can make it much more affordable to obtain broad-risk protection without greatly broadening the cost of obtaining the additional insurance protection to keep businesses going. By Mike Heuer