Why Businesses Need Commercial Umbrella Insurance

Imagine you own a popular local bakery. You serve thousands of people every day, giving them warm and delicious bread fresh out of the oven. You keep your business insured with a basic commercial insurance plan. 

One day, during the commotion of the lunch rush, one of your employees forgets to put up a “wet floor” sign. A customer slips and falls, breaking their shoulder. They take you to court and sue you for more than your liability plan can cover. 

If you’re a business owner, this scenario is more likely than you’d think. By adding umbrella insurance to your existing policy, you can protect yourself and your business from the high price accidents and liability issues. 

How Commercial Umbrella Insurance Works

It’s important to start by explaining what a commercial umbrella policy covers and how it works. An umbrella policy is not a stand-alone policy, meaning it can only be added on to another insurance policy.

Commercial umbrella insurance usually pairs well with liability policies for business owners and employees. An umbrella policy takes effect once you reach the limit of your other liability coverages. For example: If you are sued for $250,000, and your liability policies only covers up to $200,000, then the umbrella insurance would cover the last $50,000.

Umbrella insurance is designed to cover the gaps in your liability policy. Think of it as a safety net, for in the unlikely event that your liability policy doesn’t cover damages, the umbrella insurance will kick in. 

When Your Business Needs Umbrella Insurance

You might be wondering if your business could benefit from umbrella insurance. If your business has a high risk exposure, then umbrella insurance is almost a necessity. 

A high-risk business is one where accidents are more likely to happen. Here are a few examples of high-risk situations:

• Your employees regularly drive company cars
• Your business handles large amounts of assets
• You operate out of a busy storefront
• Your business involves hazardous work
• Your business could be threatened by a larger corporation 

Umbrella insurance is sometimes a less expensive alternative to increasing your liability limits. There are multiple factors that go into the price of your umbrella insurance policy. These can include:

• Location
• Industry risks
• Coverage limits
• Number of employees or vehicles 

Consult Your Insurance Provider Before Adding Umbrella Insurance 

Commercial umbrella insurance is helpful for any business working in a high-risk industry. It’s a great way to provide yourself and your business a little peace-of-mind, to protect your assets from freak accidents or unfortunate events. 

Before you fully commit to adding an umbrella policy, be sure to consult with your insurance provider to make sure this policy is right for your business and financial situation.

If you’re a small business owner or freelancer in Richmond, VA, then you’ll need an insurance policy from a company that understands your local needs. Sanford Insurance offers a wide range of commercial plans for your livelihood.

Get a quote and meet with us to discuss your unique insurance needs.