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What You Need to Do about Business Umbrella Insurance

19 May by 5280 Insurance

You cannot have better preparation for the future than buying insurance. As a result, it gives you peace of mind knowing that you are financially covered for whatever the future holds. This assertion is also true for business matters. You must protect your company, too.

With that said, is it prudent to invest in business umbrella insurance? Or can you rely on your existing coverage? If you’re asking these questions, continue reading this article.

How Does a Business Umbrella Insurance Work?

A business umbrella insurance is an add-on to your existing policy. It kicks in once your current policy has reached its limit. At the same time, you do not have to file another claim with your insurer because it has already approved your request for additional coverage.

The amount of coverage you can get from an umbrella policy is dependent on how much the additional premium will cost. Your best option is to evaluate your needs to have a realistic expectation.

Fortunately, you can get a business umbrella policy even if you have a small business because this coverage is not dependent on the size of your company. What matters here is what you need as a business owner.

What Does It Cover?

There are instances when business owners are confused about what a business umbrella insurance covers. It is essential to understand what you need to protect your business adequately.

In the most basic sense, you can use it to protect yourself from potential lawsuits. You see, it gives you an extra layer of security, and you will be able to deal with the aftermath of one of your employees doing something that will end up in court. 

For example, if one of your staff got into an accident and caused material and physical damage to someone else, it is definitely on you to pay damages. However, your insurance can help you with this liability.

If you’re wondering why not just buy a simple liability policy, here is the answer. Your liability insurance will cover you only if you are found guilty. In contrast, business umbrella insurance will cover you even if you are innocent because it protects your financial exposure.

How Much Does It Cost?

As with any other insurance, business umbrella insurance also has a premium. Fortunately, unlike the traditional ones, the premium is not dependent on the size of your business.

You can even get a business umbrella policy even if you only have a small business. Also, it is critical to point out that, in most cases, the cost of coverage is not that high.

The rate may depend on how much coverage you will be getting. Expect it to be roughly one percent of your current coverage amount as a rule of thumb. For example, if the range you want to add is $1 million, the premium will cost you about $10,000.

Conclusion

Business umbrella insurance is meant to give you peace of mind as a business owner. However, you need to ask yourself before you get one whether you really need it. As it was said above, this coverage can be redundant if you have broad liability insurance coverage in place.

If you have decided to invest in business umbrella insurance, you should trust only 5280 Insurance. We have dedicated ourselves to providing financial protection to entrepreneurs and individuals, so allow us to help you, too. Contact us now for a quote!

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