When You Need an Umbrella Liability Policy

An umbrella liability policy is a good coverage plan when considering your business’s security. Despite our best efforts to prevent them, accidents happen. Lawsuits happen. Therefore, knowing how to protect yourself and everything you own is vital.

Even with liability coverage, a severe injury on your property or a car accident could result in claims exceeding your current coverage limits, leaving you personally responsible for covering the remaining costs unless you have Umbrella & Excess Liability Insurance.

In this article, we’ll talk about what this type of insurance is, how much it costs, how much coverage you need, and when you need an Umbrella Insurance policy for your business.

What is Umbrella Insurance?

Umbrella insurance helps protect your business assets by providing extra coverage beyond the limits of your primary insurance policies. It differs from Excess Liability Insurance, where the protection offered is less extensive and provides coverage for only one of your liability policies.

What Does an Umbrella Insurance Policy Cover?

An Umbrella policy provides extra protection for expensive claims and lawsuits, and it typically covers the following:

Bodily Injury to Others

Umbrella Insurance helps with the cost of funerals, medical treatments, or lawsuits for damages when your commercial insurance policies have been exhausted.

Here is a scenario to consider. You run a restaurant, and a customer slips on a wet floor, resulting in a severe sprain. Then, Umbrella Insurance will help cover the costs of the customer’s medical expenses, legal fees, and other associated costs that exceed your Commercial General Liability (CGL) insurance.

Property Damages to Others

Suppose you own a construction company, and one of your employees accidentally damages a neighboring property while operating heavy equipment. In that case, Umbrella Insurance can cover the cost of damage, repairs, and other expenses beyond your CGL policy.

Landlord Liability

You could be liable for accidents on your rental property, even if you were not directly involved. Unfortunately, this is the life of a landlord. In such a scenario, having an Umbrella Policy is essential to supplement your Landlord’s Insurance Policy.

High-Dollar Lawsuits

For contracting businesses that take on large construction projects, an Umbrella policy can help with high-dollar lawsuits or claims and protect the business from being financially vulnerable.

What Does Not Get Coverage?

Umbrella Insurance does not cover injuries to you, damage to your business property, intentional or criminal acts, and injuries to contract workers.

It also does not protect decreased capacity from supply chain issues and damages from natural disasters like storms and flooding. You may need to consider property insurance for such occurrences.

How Much Does Umbrella Insurance Cost, and How Much Coverage Do You Need?

The amount of coverage you need depends on your business’s financial situation and the risks it can handle. For some people, the amount aligns with their assets and income. For others, it may be dependent on their potential exposure to risk. Generally speaking, the more risk exposure, the higher the liability limit.

For an accurate cost estimate, seek assistance from an RBC insurance agent who is knowledgeable about your business’s specific insurance requirements.

About RBC Insurance Associates

As an independent insurance agency, our clients’ interests come first at RBC Insurance Associates. Our goal is to provide a comprehensive, tailored insurance program that addresses your needs. We accomplish this by working with some of the finest insurance companies in the industry with the highest ratings. We will negotiate on your behalf to get the best policy terms and pricing for your program. Here is just a sample of our leading insurance carriers.