The Case for an Umbrella Policy
In the business world today, lawsuits against businesses are being filed with alarming frequency, and, unfortunately, the monetary amounts being awarded are increasingly exceeding six figures. If you are like most businesses, your Scottsdale general liability policy only covers up to $1 million dollars per occurrence. Think about what would happen to your company if a claim was awarded for $1.4 million. Could your current financial situation allow you to pay the extra $400,000 awarded? If you are like the vast majority of companies, that kind of judgment could wipe your company out. Please remember one of the flip sides of running a successful business; as your company grows in size, and, in some cases, the complexity of what you are doing, so does your liability exposure.
Commercial Umbrella Coverage refers to liability insurance that is in excess of your first layer of protection, your General Liability policy. Most businesses have a standard policy protecting itself with limits of one million per any one occurrence and up to two million in total claims in the policy period. Having a Commercial Umbrella policy for an additional $1 million would only pay if your underlying limits were exhausted. Also, please be aware that all the exclusions that are in your General Liability policy also will generally apply to your Umbrella policy. Say, your company was sued for a pollution claim and your General Liability policy did not cover that peril, then neither would your umbrella policy.
In the past, an excess liability policy or Umbrella policy was usually only purchased by very large companies and was rarely bought by small and medium size companies. However, as we all know, a million dollars is not what it used to be, and juries are routinely handing out larger awards these days, so the wise move would be to sit down with an experienced and professional Scottsdale insurance person and explore how acquiring an Umbrella or excess liability policy can protect your company.
Another area where having an umbrella comes into play is an umbrella policy excess over your auto policy. Think about what a serious car accident would do you your business? If you haven’t checked your limits recently, you should review them so you aren’t faced with inadequate limits after being sued for a serious at-fault accident. Also, if you have employees who regularly use their cars in the course of business for your company, they also put your company at risk should they cause an accident which could lead to a serious judgment against your company.
In dealing with clients over these past years, we understand their desire to keep costs down and how they feel about spending their hard-earned money on insurance of which most of them are convinced they will never need. But we also know it only takes one claim to wipe out everything they have worked for their entire life. If you would like to explore your options concerning an Umbrella or Excess Liability Insurance Policy, the experienced and professional staff at PJO Insurance Brokerage would welcome the opportunity to put together an insurance plan for your company.