What Is An Umbrella Liability Policy?

If you were to be hit with a lawsuit, could you sustain it? If you did not have the right amount of coverage, you could lose the business you’ve worked so hard to build. An umbrella policy can provide the additional liability insurance coverage that you would need if you were to be sued for damages to other people’s property or injuries caused by an accident. One of these policies will also protect you in any instances of slander or invasion of privacy. 

What Is An Umbrella Policy?caucasian woman in business attire holding a red umbrella

An umbrella policy provides two types of coverage for you and your business: liability and defense costs. While you may already have a general and/or professional liability policy for your business, umbrella policies offer extra coverage above the limits set by your primary insurance. If you are sued for damages that exceed the liability limits of your commercial insurance policy, then an umbrella policy will help pay the rest. This will help you avoid dipping into any of your assets to pay the excess out-of-pocket. One thing that an umbrella policy does not cover is physical property damage; this will fall under your regular commercial insurance policy. 

This type of policy is most useful for those who have high net worth, or a lot of assets that they might lose if they are sued. But that doesn’t mean that small businesses can’t also use an umbrella policy to protect themselves against any potential claims stemming from mistakes, accidents, or injury.

When You Should Consider an Umbrella Policy

Any business owner who is worried about losing their assets due to an accident or mistake, and who feels that their current liability policy may not be adequate, is a good candidate for an umbrella policy. This is especially true if you frequently interact with customers, work on other people’s properties, or have a business that is open to the public. 

An umbrella policy will cover:hundred dollar bills with a gavel over them.

  • Defense costs- If someone sues you, the policy will pay lawyer fees; if you lose the case, this policy can help pay for the damages owed.
  • Rental properties- If you own business properties, and something happens to a tenant due to negligence on your part, you will be covered under your umbrella policy.
  • Organizations that employ volunteers– This policy will cover you if a volunteer worker comes after you for negligence or inappropriate behavior.
  • False arrest and slander- You will receive coverage to defend yourself in the case of false arrest; this policy will also help you pay to get your reputation back.
  • Pain and suffering- If you are found at-fault for an incident, you will be covered in the case that someone claims for pain and suffering resulting from the incident.

If any of the above could apply to you or your business, and if you think these claims could exceed your liability limits, then it is worth looking into getting an umbrella policy. To compare plans in your area in minutes, and to save money, connect with an EZ agent. Our agents will provide you with free help to make sure your business is completely protected from any unforeseen accidents. We will assess your financial goals and insurance needs, and find you the perfect policy. To get instant quotes, simply enter your zip code in the bar above, or to speak directly to an agent, call 888-615-4893.

About The Author: Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.
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