The business world today is being held accountable more and more often. In many cases, this means that a business might be stripped of its traditional business insurance limits during a catastrophic event. These are events that a business owner likely never dreamed of occurring to them. It is important, though, to plan for these unexpected events.
Umbrella Insurance Provides Overarching Protection
Legal settlements can not only rattle the framework of a business, they can put it in a serious financial bind. While a business might have been diligent about ensuring that they have adequate amounts of commercial auto insurance, general liability insurance and employer’s liability insurance, they might be unpleasantly surprised to learn that it is not enough. Given the fact that insurance settlements continue to rise, a commercial umbrella insurance policy is an effective way for a business to protect itself against a large loss.
Commercial Umbrella Insurance: Protective and Affordable
Many businesses – especially small and medium sized ones – might wonder about the necessity – as well as the affordability – of such insurance. Commercial umbrella insurance is unique, though, and it is that uniqueness that makes it so affordable. During an event, such as a legal settlement, your other insurances will be tapped for payment first. This means that those insurances that are required – auto, commercial liability and employer liability – are used to their limits.
Then the Umbrella Comes Out
Once the limits of your other, mandatory insurances are reached, then your commercial umbrella insurance kicks in. While this type of insurance is optional, purchasing a policy is considered to be a good investment in the long term viability of a business. To put it in perspective, for many small and medium size businesses, just one accident, injury or mistake that is determined to be the fault of the business can completely wipe out its financial coffers if the settlement outweighs its monetary limits.