How Umbrella Insurance Can Shield Small Businesses from Risks

umbrella insurance for small businesses

How Umbrella Insurance Can Shield Small Businesses from Risks

Umbrella insurance offers protection beyond the coverage limits of your other existing policies, like homeowners insurance or auto insurance. Typically, the additional claims covered by an umbrella policy include injuries, property damage, specific lawsuits, and personal liability situations.

Remember, umbrella insurance does not cover professional liability insurance (lawsuits over professional mistakes like missed deadlines), personal injury, or any liability you assume under a contract.

Factors Affecting the Cost

Some primary factors that affect the cost of a commercial umbrella insurance policy are:

• Industry and risk
• Location
• Number of employees
• Number of vehicles

When Should You Opt for Umbrella Insurance?

Small businesses that need more liability protection because of certain high-risk factors or specifically want to cover some exclusion should purchase this insurance. Getting an umbrella policy is a cost-effective alternative compared to increasing the limits on your commercial liability insurance.

How Does Umbrella Insurance Work?

If your business poses a significant risk to your employees, umbrella insurance will give you additional protection against injury lawsuits from your own staff. In general, if your small business involves working on someone else’s property or your business is open for the public to visit, the risk of injury and lawsuits is considerably higher, so an umbrella policy is necessary.

Injuries can happen even in normal circumstances, and umbrella insurance can be a cost-effective way to cover them. For example, assume you run a retail shop, and a customer accidentally slips and injures themselves. If they sue you for $1 million, your general liability insurance coverage is not enough to settle that amount, as it can pay only up to $800,000. However, an umbrella policy will cover the remaining $200,000.

These are some of the advantages of getting umbrella insurance for your small business. For assistance with all your insurance needs and questions, contact the experts at Club Agency Insurance Brokerage in Garden City, New York. We help you get the best insurance for your business.

COVID-19 Update:

At RMS and associated firms, business continues as usual. Our staff is remote-capable and available to handle all partners, brokers, and insureds at the present time. Contact us today!Executive Order for Policyholder Payments