The Value of Umbrella Policies
by Alison Neumann

The Value of Umbrella Policies

If you own a business, you probably have insurance policies for general liability, property, auto liability, and possibly workers’ compensation if you have employees.  However, there is one standard liability policy that is sometimes overlooked – umbrella liability.  No, it’s not insurance for those things you hold over your head when it rains, but much like those types of umbrellas, umbrella liability policies provide extra coverage.

Commercial umbrella liability policies offer an extra layer of protection for businesses with claims against bodily injury, property damage, and other liability claims.  The policies are designed to extend coverage when your business’ general liability, auto liability, and employer’s liability policy coverages are exhausted.  They can help cover legal fees and can come into play if you are found liable for damages.  Umbrella policies can protect your business’ significant assets and keep you from going out of business if you are involved in a lawsuit by covering fees owed to your defense lawyers or fees owed in damages to the other party.  Umbrella policies can also provide legal fee gap protection, and the policies act much like a safety net for unforeseen liability costs.

For many contractors entering into business agreements, umbrella liability policies are required.  This can give the owner of the job the peace of mind that he/she hired a responsible contractor, and that if a claim were to arise, there would be adequate coverage.  Many professionals in the legal or medical trades are also required to have an umbrella liability policy in place for protection against professional liability lawsuits.

Umbrella liability policies come in many different forms, depending on your business’ needs.  Some businesses need higher umbrella liability limits, while others need specific coverages.  Umbrella premiums vary depending on coverages and carrier.  Can a business go without umbrella liability coverage?  Maybe, but who wants to be caught out in the “rain” without an umbrella?!  To learn more about your business insurance needs, contact your agent today.


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