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Maybe you already have an insurance policy for your business. After all, you’ve been very prudent about protecting your business properties or vehicles from financial harm. But what do you do if your claim amount exceeds your limit?
However, such realities are unavoidable. Sometimes, a disaster is just more than what we prepared for. Luckily, you’re not out of options yet, because that’s exactly what commercial umbrella insurance is for.
In this article, we’ll discuss everything you need to know about this type of commercial insurance.
What is Commercial Umbrella Insurance?
Simply put, commercial umbrella insurance is an add-on that extends the coverage limit of your existing primary liability insurance policies.
We know that liability insurance is financial protection for when you need to pay for something when you are the party at fault. However, sometimes the amount that you have to pay is too much for your coverage limit.
In situations like this, you will need to pay the extra out of pocket. For example, if you have a liability policy limit of $2 million and your claim is worth $2.5 million, you will have to cover the $500,000 difference.
That is—unless you have commercial umbrella insurance, which extends the limits of these primary liability coverages.
The best part is getting commercial umbrella insurance from a different insurance provider than your current insurance policies. This means that even if you already have an existing policy, you can still get your commercial umbrella insurance here at Magnum Insurance.
Magnum Insurance believes in flexibility and customizability, so all you have to do is call us, and we’ll find a policy especially for you.
Who Should Get Commercial Umbrella Insurance?
If you own any type of business, it’s only wise to have commercial umbrella insurance to provide additional protection.
However, some businesses are more at risk than others. Although this type of policy is advisable for everyone, it’s even more important if you belong to one of the following categories.
Businesses with a high volume of customer visits
In general, the more people visit your business establishment, the more at risk you are of liability claims.
This is because, in general, having more customers increases your risk exposure. There are more chances of bodily injury, customer complaints, and property damage in an establishment with many customers. Additionally, if a customer gets injured or destroys a high-value property within your premises, they can sue for damages.
Because your exposure is greater, your risk is higher, as well. If something happens, commercial umbrella insurance might just be the one to save your finances.
Businesses that work with dangerous equipment
If you work with dangerous equipment near customers, you’re also at higher risk of becoming liable for bodily injury.
This can occur in high-volume retail stores that frequently restock items with customers nearby or in lumber yards that use heavy machinery to transport products while customers are present.
Businesses that conduct business offsite
If you’re a builder, repairman, contractor, or some other type of business that does a large part of the work at the customer’s own property, then you’re also considered high-risk. Your workers can cause injury or damage property easily when they are working off-site.
Whatever kind of damage it is, it would be smart not to underestimate the amount of potential financial damage that off-site businesses can create.
Commercial Umbrella Insurance Coverage Basics
Umbrella insurance coverage essentially works as general liability insurance, with the added condition that you need to have an existing policy first before you can avail of it.
This is because this type of insurance policy can only increase the limits of existing insurance. However, as mentioned, you don’t necessarily have to get both policies from the same provider.
In this section, let’s discuss the basics of how a commercial umbrella insurance policy works.
Coverage
Commercial umbrella insurance has the same coverages as your primary liability insurance policies. It also covers medical costs of bodily injury, repair and replacement in property damage, and legal expenses.
Limits
Even though they’re created to raise the limit of basic general insurance policies, commercial umbrella insurance policies still have aggregate limits. These limits typically go from $1 million to $15 million, depending on your policy.
Inclusions
Although it does cover a lot of things, this type of insurance policy doesn’t cover all types of claims.
Commercial umbrella insurance only covers commercial liability. So, if some of your equipment breaks down and the claim exceeds your commercial equipment policy, you would still need to cover the rest out of pocket because this type of insurance doesn’t cover equipment.
Determining the exact coverages of commercial umbrella insurance can also get complicated, especially if you’re a business with unique needs.
But don’t worry, here at Magnum Insurance, we’ll do all the hard work for you so that you can breathe easy knowing you’re protected at all times.
Commercial Umbrella Insurance Cost
The exact premium that you will have to pay for your commercial umbrella insurance policy depends on several factors. For example, small business umbrella insurance will differ vastly in price to big businesses with millions of dollars in capital and higher base limits.
In general, the cost of umbrella insurance premiums will depend on:
- Underlying liability coverage
- Industry
- Size
Our agents here at Magnum Insurance are highly trained to assess businesses and write policies exactly according to their needs. With Magnum Insurance, you can always count on policies that fit your business like a glove.
Getting Commercial Umbrella Insurance with Magnum Insurance
If you’re one of the businesses discussed above, you’re more likely to face a debilitating situation where your claim exceeds your policy’s limits.
In these situations, acquiring this type of insurance for your business will not only give you peace of mind but will also protect your hard-earned finances.
By taking out a commercial umbrella insurance policy with Magnum Insurance, you can be at peace knowing that your business will be protected when the time comes.
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