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Most business insurance policies–whether they cover commercial liability or commercial property–have a payout limit. Normally, your business would be on the hook for any expenses above and beyond this limit. This type of unexpected cost is something that could threaten the very survival of your business.
A commercial umbrella policy kicks in only if your main business insurance policy reaches the payout limit. At that time, the commercial umbrella policy would pay out the remaining costs up to the limits of the policy.
For example, let’s say you have a liability insurance policy of $500,000 for your business, but you must pay damages of $700,000. If you have a commercial umbrella policy in place for your business, the liability insurance policy will pay out in full first, and then the umbrella policy will pick up the remaining $200,000.
The beauty of umbrella insurance is that, because there’s a relatively low chance it will need to pay out, it’s often considerably cheaper to purchase than you might expect.
Commercial umbrella insurance is a great way to further protect your assets. Reach out, and we’ll help you to determine if it’s right for your business.