Umbrella Insurance with Business Insurance Los Angeles in 2020. In a culture where litigation is commonplace, business owners have many more worries than making profits and retaining top employees. If your product injures a consumer, your organization could face a devastating lawsuit, and a tainted reputation in the marketplace. To assist with the financial burden of a claim, many business owners purchase commercial umbrella insurance. On top of their insurance theirs a commercial general liability insurance policies.
Most CGL policies have an aggregate limit that, once exhausted, will not cover any other excess claims. Experienced business professionals understand that the litigious nature of our society combined with surmounting liability judgments are reason enough to purchase additional coverage.
Businesses are also liable for the health and safety of their employees and for their employees’ behavior. For instance, your business could be held liable after your holiday party results in property damage to a rented banquet hall. You may also face litigation if your business office has a carbon monoxide leak that causes a number of employees to get extremely ill. To protect against an unforeseen claim similar to these, commercial umbrella insurance protection is a must.
Purpose of Umbrella Insurance Coverage
Umbrella coverage gives protection to an organization against monumental liability claims that can demolish a business through a large financial judgment. Typically, an umbrella policy serves the following purposes:
Determine What Insurance You Need
Each business has unique needs. Most businesses must cover incidents where people accidentally get hurt in the business. The property is accidentally damaged or there are other claims like slander. While the type of coverage you need will vary depending on the nature of your small business. Here is a quick overview of the important insurance plans for most small business owners:
- Provides coverage for potential damages and court defense fees that exceed underlying insurance policies (typically CGL policies).
- It provides coverage in situations that do not cover by underlying insurance policies. But, are not excluded from the umbrella policy. This benefit is subject to a self-insured retention (SIR), similar to a deductible, in which the policyholder is responsible for losses up to the SIR amount.
- Applies to claims where the aggregate limit of the underlying policy has been met. The umbrella policy will cover the portion of the claim with the underlying policy because there are not enough funds available in the policy to cover the entire claim. For instance, if at the time of a claim your CGL policy has $500,000 remaining and the claim in question is $1.5 million, then the CGL policy will cover $500,000 and then the umbrella policy will cover the remaining $1 million.
A typical umbrella policy has the following features:
- Offers coverage for worldwide; personal injury; blanket contractual liability protection; care, custody, and control; non-owned aircraft liability; watercraft liability; advertisers liability; liquor law liability; an explosion, collapse, and underground (XCU) liability.
- Policies follow form, meaning they abide by similar provisions and cover similar losses as the underlying policy. The umbrella policy makes the business responsible for the loss if it exceeds SIR limits. The damage must also involve personal injury, property damage or advertising injury.
- Policies either cover all individuals or cover parties that gain insured status within the contract. Policies also protect an organization’s executive officers, regular employees, directors, and stockholders acting on behalf of the organization. Protection for additional insureds does not include when claims involve motorized vehicles, watercraft, and aircraft.
Beyond these stipulations, a commercial umbrella policy ascertains that an organization must hold an underlying insurance policy during the term of the policy. To learn more about averting your business risks with commercial umbrella insurance, contact NEWS Insurance Services at 9497911300 today.