Why Do I Need Umbrella Insurance for My Business?

Business owners who have a growing business sometimes forget to consider the risks which a larger and more successful business may face over time. Having an umbrella policy in place will ensure that your business is covered even if unforeseen circumstances result in a legal payout that exceeds the cap of your current liability policy. Taking the time to find the right umbrella policy for your business is the best way to ensure your business’ fiscal well-being. Once you have reviewed your existing coverage, contact your insurance agent and ask about umbrella coverage.

What Does an Umbrella Policy Do?

The purpose of an umbrella policy is to cover any liability expense over and above the cap of your traditional business liability policy. In most cases, your business liability policy is enough to cover any lawsuits or judgments you may experience. In situations where the judgment exceeds the cap of your liability policy, your business would then be required to absorb the excess amount. This could cripple your business financially and take years to overcome, or it could put you out of business.

What Type of Business Benefits from an Umbrella Policy?

All types of businesses will benefit from having an umbrella policy in place. While not all will need extremely large policies, having the extra coverage is always beneficial. Smaller businesses may not have the financial resources to overcome a financial catastrophe that could follow a large judgment. While large companies may be able to absorb the additional financial stress of an expensive lawsuit, it may put them in a financial bind that will take them several years to recover from. There will always be some degree of risk and liability no matter what size or type of business you have.

What is Covered under a Business Umbrella Insurance?

Business umbrella insurance will cover claims involving bodily injury suffered by an injured customer or employee. It will also cover property damage caused by your business to someone else’s property. However, umbrella insurance covers only such damages/injuries that exceed the limits of your general liability policy. So, if you do not have general liability insurance, the umbrella insurance coverage will not be available.

Important Considerations When Choosing an Umbrella Policy

There are several things you should take into consideration when choosing an umbrella insurance policy. First, know your company’s true value. Next, determine the various types of risk you may face. Take a close look at your employees to determine what type of liability you may have due to age, inexperience, or other factors.

Identifying your risks and comparing them to the value of your business will help you see the benefits of having an umbrella insurance policy in place. Every type of business will carry different types and degrees of risk. Talking to your insurance agent will help to clarify a few things and make them easier to understand.

To learn more about business insurance policies, contact the experts at VGW Insurance in Texas today. We look forward to helping you with all your coverage needs.