Commercial umbrella insurance offers an additional layer of liability protection by covering costs that extend beyond the coverage limits for your standard insurance policy. It complements other policies by taking control when the other liability coverage limits have been reached, as you’ll see from the 5 facts about umbrella policies.
Commercial umbrella insurance covers the same kinds of costs as business liability insurance, like attorney fees, medical expenses, and damages when the company faces a lawsuit. The policy can also be used for covering commercial automobiles, commercial general liability, workers’ compensation, and other liability policies.
Here are 5 critical facts about commercial umbrella insurance that you should know.
1. It Is Unique to Your Business
Many types of insurance utilize the use of standard forms based on the industry standard. These forms vary little from company to company. For example, ISO Commercial General Liability Coverage is the insurance standard for general liability policy coverage and explains why there is a similarity in many CGL policies.
Commercial Umbrella Insurance is very different from those typical policies. There’s no benchmark or standard for the insurance policy, which means the insurer creates their standards. Consequently, it’s important to work with an insurer that understands the risks of your business and other crucial data. You should also note that this policy typically works alongside other liability coverages like general liability insurance.
2. Following Form Commercial Umbrella Insurance
The following form of commercial umbrella insurance implies that it will cover all aspects that your underlying policy already covers. However, most umbrella and excess policies have certain exclusions or an absence of coverage by the pre-existing policies.
3. Cost of Umbrella Insurance
Umbrella pricing is typically a pre-set rate that is based on the primary premium. However, you may decide to defer to the judgment of the underwriter. You may also anticipate spending an additional 5% to 8% of the significant premium on umbrella policies. A commercial umbrella insurance policy with $1 million in coverage can cost as little as a few hundred dollars in twelve months.
4. Additional Insureds
The additional insureds are individuals or companies that you have a business relationship with and could face a risk of a lawsuit if one acts carelessly during business interactions. In the case where the primary policy has extra insureds, they will carry over into the conventional umbrella policy.
5. Additional Exclusions
There are scenarios where a commercial umbrella insurance policy may have certain exclusions that are not in your primary liability policy. For instance, most insurers exclude certain coverages that apply to pollution, employer’s liability, workers’ compensation, recall of products, employment-related problems, and work-impaired property. For this reason, it’s crucial to carefully consider the terms and conditions of the umbrella policy to understand what your insurer will cover and what is not covered.
The 5 facts above highlight the importance of a commercial umbrella insurance policy. Commercial umbrella insurance is essential for the protection of commercial insureds against ruinous claims that extend beyond the liability limits stated in basic general liability, business auto liability, and other commercial liability coverages.
Many businesses in New York and beyond don’t have enough liability coverage to appropriately secure their assets in the event of an emergency. For commercial umbrella insurance for your company, contact Northeastern Group. Serving New York and many other states, we are here for you at this time.
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