Plapp Insurance Services

Umbrella Policy

Nov 5, 2015

Today's business world is full of uncertainties. Due to the many risks that businesses face, lawsuits are becoming as unpredictable as the weather. If your company is forced to pay a large settlement, your primary insurance may not provide the protection you need. Extra liability protection is an increasing necessity for all businesses, as million-dollar judgements are becoming more common.

The best way to fully protect your company is by purchasing a commercial umbrella liability policy. This policy provides coverage in million-dollar increments above the required liability limits of your current policies.

Before you are able to purchase an umbrella policy, you may be required to carry certain minimum amounts of insurance in your underlying policies. However, the cost for your umbrella coverage will be lower if your primary deductibles and limits are higher. Keep in mind that some insurance carriers will only provide umbrella protection if some or all of your basic insurance is written by that same carrier.

If you do qualify for an umbrella policy, make sure it carries the same renewal date as your other policies. This is important because coverage is only activated after the limits of underlying policies have been exhausted. To guarantee the limits are sufficient with the current rate of inflation, it is essential to periodically review your policy. Misfortune can be avoided by increasing you coverage to provide maximum protection. Moreover, any additional million-dollar increments that you purchase will cost less than the first million in coverage.

If you have any questions or are interested in purchasing a commercial liability umbrella policy, please contact us for more information.

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