Regardless of what type of company you’re operating, you need to have insurance coverage. There are a plethora of different policies with varying coverage options. Deciding which is right for your business can make it a little confusing. In most instances, you will want to get additional umbrella insurance. This type of policy will cover any additional costs that your liability policies. Remember these five ways commercial umbrella insurance will protect a business before deciding if you want to make the investment.
1. Lawsuit Protection
In both frivolous lawsuits and those that require you to defend or repay because of bodily injury, damage to property, or other initializes, you want protection. Even if you’re not required to pay anything because you win the case, you’ll have help paying your attorney. In addition, the coverage will cover court costs and other expenses related to the case regardless of how the case turns out.
2. Catastrophic Loss Coverage
Nobody wants to consider catastrophic loss something they will need, but as a business owner, you know it’s possible. these losses are so large that they could potentially bankrupt you and shut down your business. With umbrella insurance, you can relax knowing that an extra layer of protection is in place to prevent severe financial hardships.
3. Contractual Requirements
Whether it be a landlord, a client, or someone you associate with, your company will likely have contracts signed with different people. These contracts typically require umbrella insurance. These connections you make will want additional coverage to protect themselves, and as a result of your contract, you’ll get the party responsible for having it.
4. Greater Coverage Limits
Settlements, large liability judgments, and several other occurrences can cause you to reach for your original insurance policy for your business. However, you may be surprised at the limits to get you back to whole again after the loss. Frequently, business owners will think they have nothing to worry about, only to discover that it’s only partial coverage.
For example, you have a liability case and are found responsible. As a result, you’re expected to pay $1.75 million. You check your policy, which only covers you for $1 million. That extra three-quarters of a million dollars is an amount that could very easily put you in a tough situation, especially if you’re a smaller entity or start-up. The umbrella insurance will kick in after that original million and cover the rest of the settlement amount.
The Benefits of an Insurance Policy for a Manufacturing Company(Opens in a new browser tab)
5. Overall Peace of Mind
You’ve worked so hard to get your business up and running. The last thing you want to have happen is losing everything because you don’t have enough insurance coverage. Instead of worrying about it all the time, the additional coverage will allow you to breathe better, knowing you’re properly protected. Then, you can focus on what’s important, like building your business and brand.
Before you avoid the commercial umbrella insurance options available because of the cost or because you simply don’t want to deal with it, keep in mind all the extra coverage you’re getting. Of course, you’re not expecting an accident or issue of great magnitude to occur, it’s best to be prepared if it does.