June Coverage Check: UMBRELLA Coverage

Posted on June 09, 2016

by Stefanie White in AW360 Risk Management, Business Insurance | 0 comments

Umbrella!A new month means a new insurance coverage highlight! With all the different insurance policy options for your business or home, it’s hard to know just what you need as part of your risk management plan. One coverage that is universal to everyone’s plan is the umbrella liability policy. It may sound like just an extra expense your agent is trying to sell you, but it’s a coverage that if needed can really make a financial difference.

So, what is an umbrella policy? It’s an extra layer of coverage that- like in an umbrella in a rainstorm – sits over your liability policies. ┬áIn the business setting, it is designed to protect your organization against monumental liability claims that can devour a business financially. A commercial umbrella policy can function in the following ways:

  • Coverage for potential damages and court defense fees that exceed underlying insurance policy limits.
  • Apply to claims where the aggregate limit of the underlying policy has been met – ex: if your general liability (GL) policy has a limit of $500,000 and the claim is question is $1.5 million, the GL policy would cover only up to it’s $500,000 limit. An umbrella policy would cover the remaining $1 million.

Who should have an umbrella policy? Simple expert opinion is everyone! Though the chances of facing such a large settlement are not extremely common, the fact is our society as a whole is becoming more litigious. Plus, it only takes one bad situation or one large claim to wreak financial havoc.

We suggest you talk to your Risk Advisor or Account Manager about adding or reviewing your umbrella policy. They can help you determine what level of coverage is right for your business and budget. And if you add it for your business, make sure you have it for your personal coverage too!

 

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