Commercial Umbrella and Excess Liability Insurance

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SPEAKER 1: What is umbrella insurance?

Take a moment to think about the catastrophic impact a large lawsuit could have on your business. There's no way to predict what you might be required to pay in damages and just one lawsuit can put your business assets at risk. Umbrella insurance provides an additional layer of financial protection over and above the coverage limits of your other liability policies.

Say one of your employees uses copyrighted music in an ad for your business without securing licensing rights. The owner of the copyright sues, and the judgment is against your business for 1.5 million dollars in damages. If your liability insurance has a limit of 1 million dollars you would be responsible for the balance. A commercial umbrella policy is designed to bridge the gap and cover the costs of the loss up to the umbrell apolicies limit, and an umbrella policy isvery affordable. It's a small investment that can help protect your assets and keep your business in business.

To get started with commercial umbrella coverage and other business insurance solutions, contact a traveller's independent agent or visit Travelers.com.

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Umbrella insurance is liability coverage beyond the limits of your other liability policies. Businesses may have a higher liability risk because they offer products or services to customers – so protecting you and your business is essential to keeping things running smoothly in the event of an unforeseen circumstance. In addition to the standard insurance coverages by business owners, like property insurance, workers compensation, auto insurance and more, umbrella insurance can offer extra protection above and beyond the limits of these standard policies to keep your assets safe.

Umbrella insurance is recommended for business owners because businesses face risks of being sued, whether by customers, other businesses or even employees. Generally, anyone who owns property, has significant assets or engages in any type of behavior that generates risk (such as running a business) should strongly consider umbrella insurance. Just one hefty lawsuit can impact your current assets and your future earning potential. If you’re sued for a significant amount of money and found liable, and you don’t have enough liability insurance coverage to cover the cost, you may be responsible for the amount not covered by your liability policy.

You can usually purchase an umbrella policy from the same insurance company that your other business policies were purchased through. Insurance companies often require you to hold your primary insurance coverage with them in order to add an umbrella insurance policy. You should also expect to maintain certain limits of liability for your primary liability coverage in order to add the extra coverage provided with an umbrella policy.

The cost is largely determined by the policy limit you select and the specific risks facing your type of business. Coverage levels typically start at $1 million and can go well beyond, depending on your needs.

Deciding how much extra liability coverage you need will depend on several factors, and an experienced independent insurance agent can help you decide what you need.

• How risky is your business? A business that mass-produces a product, engages in advice or consultation, has a hazardous work environment for employees or frequently operates motor vehicles is likely at a higher risk of being sued. These types of activities provide good reasons for purchasing an umbrella policy.
• What is the value of your business assets? Take a look at what your business owns – including real property, equipment, furniture and other possessions. Generally, the higher the value of those assets, the higher the umbrella policy limits your business will need in order to protect your finances. You should at least have enough insurance to replace your company’s total assets.
• How would loss of future income impact you? It’s important to consider that a significant lawsuit could cost you more than your current assets. It could threaten your potential future income, too. Factor this in when deciding how much coverage you need on your umbrella policy.

While an umbrella insurance policy can protect you in case a liability claim exceeds your primary policies coverage, it does not exempt you from all legal risk. Umbrella policies generally cover liability that stems from business activities and business property that are covered by your primary policies. Things like uninsured motorists, flood damage and certain instances of property damage may not be covered, so it’s important to discuss what is and isn’t covered with your insurance agent when deciding on an umbrella policy coverage.

Many businesses cannot get the insurance coverage they require in the standard lines marketplace for reasons like multiple claims, a lack of history or unique classification. With more than 40 years of experience, Northfield is able to provide a wide range of coverage for hard-to-place risks so companies can continue to grow with the confidence that they’re properly protected.

Even small businesses can have big liability exposures, which is why Travelers A/B Umbrella is available as part of our wide range of small business solutions to help you grow and stay protected.

In the event you may require an extra layer of protection beyond what primary insurance may cover, Travelers offers excess liability to safeguard your business from potential calamity.