Business owners understand that it’s not enough to only have primary insurance policies in place in order to properly protect their company from unexpected events. A commercial umbrella policy provides extra coverage to existing underlying policies to help cover costs exceeding standard limits.
This broad type of additional liability coverage is designed to sit over top of the other policies, such as general liability insurance, workers’ compensation insurance, and commercial auto insurance, and provide protection in case a claim goes over the limits of those policies.
At Doeren Mayhew Insurance Group, we offer insurance solutions that protect your business from the potential risks that come with operating your business. Our team of trusted advisors delivers the guidance, protection, and advocacy to ensure your business’ long-term resiliency and financial health. With a commercial umbrella policy, you will have the peace of mind that your business will be covered in the face of costly events or lawsuits.
1. Existing Policy Limits
Business owners and executives often mistakenly believe that a single business insurance policy will protect against a wide variety of exposures. Not only does this often result in a gap in coverage, but also comes with a single policy coverage limit that may not adequately protect the business. That’s why a commercial umbrella policy is critical in protecting the business — it provides additional coverage above and beyond any existing liability policies.
2. Innumerable Liability Risks
Businesses encounter many different areas of potential risk. These range from having a high level of public exposure, to owning many commercial auto vehicles, to operating heavy equipment, or utilizing hazardous materials. What’s more, complaints of discrimination or unlawful termination add yet another layer of liability risk. While many underlying policies address these concerns singularly, an overarching umbrella policy broadly helps to address unforeseen exposures, protecting against large, unexpected liability claims and lawsuits.
3. Critical Asset Protection
As a business grows, it becomes increasingly important to protect its assets. In the event of a significant liability claim exceeding the limits of primary insurance coverage, if the business lacks sufficient funds to settle the claim, it may be required to liquidate assets — including cash reserves, property, and investments or retirement savings — in order to meet the obligation. Commercial umbrella insurance ensures the business can continue to operate without having to liquidate assets to pay claims.
4. Legal & Contractual Requirements
In some cases, commercial umbrella insurance may be required by contractual agreements, such as when doing business with larger clients, government entities, or other organizations. Commercial umbrella insurance assists in fulfilling these requirements by offering additional coverage limits to existing policies, avoiding potential breach of contract issues or financial penalties.
5. Cost-Effective Risk Management
Umbrella insurance policies are often a less expensive alternative to increasing the liability limits of multiple underlying policies. Commercial umbrella policies also serve an important role in a comprehensive risk management plan, helping businesses to mitigate financial risks in the face of unforeseen events or catastrophic events.
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At Doeren Mayhew Insurance Group, we have been recognized as an innovator in delivering customized, integrated commercial insurance solutions for more than 130 years. Our team of trusted insurance leaders understand the complexities of risk management. Request a consultation to see how we can help your business ensure its long-term financial success with a customized insurance plan.