If you own a small business, it's important to have umbrella insurance. Although most businesses think of this as an option only available for larger companies with more risks and assets at stake. The truth is that your personal liability can extend beyond what other policies cover.
For instance:
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General damages in case something goes wrong (like litigation),
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Employees’ compensation claims
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Attorney fees if sued over negligence causing injury.
In short, accidents do happen even when we're careful planners. So having commercial coverage works best for your business!
Now let us first understand what exactly is an umbrella insurance policy?
An umbrella insurance plan provides financial protection for a business in case it gets too costly or risky. It is like extra coverage that sits on top of your existing policy. Just like an umbrella, it provides protection against rainstorms and other natural disasters in order to protect both you and those who rely upon the success for their livelihoods
Makes sense, right?
If you are still not convinced that your small business needs this extra coverage, here are a few vital ways it can help.
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In the event of a claim, it can be more cost-effective to purchase umbrella insurance for your small business than increasing limits on existing liability policies.
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One policy can cover you for the many different kinds of coverage that are available. It helps provide protection against costly claims by broadening the coverage you get with your base policy. But be aware that self-insured retention applies if it has one or more riders attached to it. And may vary depending on state laws.
- For example: If you've had the unfortunate experience of being in an accident and need help covering medical expenses, lost wages, or other damages not covered by your liability policies then umbrella coverage can give a great safety net. However, there could still be some expenses that would need paying out of pocket such as settlements (or Reimbursements), legal defense fees etcetera.
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Businesses should invest in umbrella insurance to protect themselves against large liability claims. The cost of general liability is usually limited, but if you have a $3 million dollar claim then there will not be enough money for your business' future needs.
- A small business insurance coverage only covers up to an agreed amount ($2 mill). So, where do these extra millions come from? If you're like most small businesses owners and don't own any umbrella coverage then it would potentially be coming out of your pocket.
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We all know that lawyers are expensive, and even if you have the funds to hire one there is always that nagging feeling in your gut telling you not to. Also, there may not always be enough cash reserves for such large-scale lawsuits or other costly legal proceedings. The legal expense incurred poses a significant threat to your peace of mind if not covered in the insurance policy.
This is exactly what commercial umbrella insurance does, it takes care of the legal expense.
Now that we have successfully explained why umbrella insurance is important to protect your business, let us understand how much coverage your business needs?
The amount of umbrella coverage you need depends on your business’s assets and what's at stake in the case of a big claim. Pretty much any small or medium-sized company can benefit from an additional layer of protection. As it adds some peace of mind knowing that no matter how things shake out with one client, there will still be plenty left standing after they're gone!
Conclusion:
Running a small business and managing the expenses that come with it can be very challenging. But if you want to have peace of mind knowing your company is covered in case something happens–whether big or little! –a self-insurance policy might just be what you are looking for.
The benefits of having an umbrella offer far exceed any upfront costs when considering all aspects involved: including loss control, claims processing time frames (and how quickly they get approved!), retention funds
Don’t wait until you are at risk to find out that your small business needs umbrella insurance. To secure it from the inside out, contact small business insurance agencies for reliable coverage today!
