Business insurance policies exist to protect your company against sizeable financial downfalls following a loss. Each coverage will protect against specific perils as noted within their policy. For example, your commercial auto insurance policy will obviously protect your company’s vehicles, while a general liability insurance policy is made for covering liability perils. But in the real world, you might find yourself in a situation in which more protection is needed than a single policy can provide. Threats exist to your business that may not fit within the standard limits of your policy, and when you’re held liable for such losses, you’ll still need protection to avoid paying out of pocket.
A commercial umbrella insurance policy is an extra layer of protection for your business against liability-based losses. Your policy kicks in where others let off and can be the perfect safety net for your company by offsetting lawsuits and legal expenses. Being a business owner means doing whatever it takes to make your business succeed. Protecting your company against losses and maintaining its financial health is no easy task. With umbrella insurance, you are better prepared to move forward after a major loss, rather than paying more money due to the event while waiting in limbo.
Commercial Umbrella Insurance Basics
Understanding how commercial umbrella insurance policies work doesn’t have to be over-complicated, and knowing what your coverage provides can help you stay prepared. Here are some of the basics involving commercial umbrella insurance:
- Your policy will provide protection against medical expenses, legal fees, and paying for another party’s property damage when your company is at fault.
- It won’t, however, pay for your property damage or injuries sustained by an employee.
- Having a commercial umbrella policy is important, but you’ll also need other policies to qualify. This is because umbrella coverage is only used after another policy’s coverage limits have been met due to a substantial loss. An example would be using your umbrella coverage in the aftermath of an accident after your commercial auto insurance policy’s limits have been drained.
- A commercial umbrella policy can also help protect your company against advertising disputes depending on your coverage.
- Like many insurance policies, your commercial umbrella policy will also come with exclusions. In most cases, you won’t be able to use your protection to restore losses involving risky behavior that leads to injury, recalled products, etc. It is best to review your policy with a licensed insurance agent to better understand how your specific policy protects your business.
How Is Commercial Umbrella Insurance Calculated?
Your commercial umbrella insurance premium is calculated through a variety of factors. Here are some of the most common examples:
- The number of assets in need of protection, and the amount of coverage your business enrolls in.
- The nature of your business.
- The size of your company and the number of employees you have.
- Where your business is located.
- Your company’s claims history.
Ultimately, every insurance company is looking to determine the amount of risk you will bring on as they take your business as a client. If you present more risk, you’ll pay more for your premiums than those with less risk, and vice versa.
Each of these factors will be weighed and assessed by an insurance brand according to that brand’s own algorithms and methodologies. Because there are so many different risk factors, as well as methods for calculating risk, you can expect a wide range in commercial umbrella insurance premiums. This applies when comparing rates among other businesses, various industries, and even comparing the rates that you’ll receive to cover your company.
How Much Commercial Umbrella Insurance Do I Need?
The purpose of a commercial umbrella insurance policy is to protect your company’s valuable assets. In the event of a lawsuit, if your company lacks enough insurance coverage, your business’s financial assets can come under fire forcing you to pay out of pocket. Therefore, when shopping for a commercial umbrella policy, you’ll want to make sure that you have enough protection to cover all of your company’s assets.
Policy limits can differ and the more coverage you purchase, the more your business can expect to pay in premiums. For example, a small business looking to receive $1 million in coverage will have a lower premium rate than a business of the same size but in need of $2 million worth of coverage. The best way to determine how much coverage is best for your business is to audit your company’s needs with a licensed insurance agent.
Your business is unique. It doesn’t matter which industry you work in, you are not the same as your competitors, suppliers, or partners, and deserve the protection that reflects these differences. This is why auditing your business is so important. The last thing any business owner wants to face is a situation where they believe they are protected only to find out they are not. By reviewing your business operations and coverage needs, you can determine which insurance products make sense for your company and the level of protection. When reviewing with the right agent, you’ll avoid overpaying for protection while closing coverage gaps at the same time.
Why Small Businesses Need Commercial Umbrella Insurance
Small businesses are prone to a number of risks just ask larger companies are. Automobile accidents happen, customers injure themselves, and all the while, you’re stuck trying to overcome such obstacles while still turning a profit. That is unless you have the right commercial umbrella policy for your business. The extra level of protection is an investment in making sure that if your business were to become liable to a sizable loss, you’ll be able to keep your company moving forward.
Best Commercial Umbrella Insurance Carriers
Coverage needs may vary, but finding the best commercial umbrella insurance carrier is what every business owner is after. It doesn’t matter if you are a small startup in the heart of Dallas, Texas, or running an Italian restaurant in Flower Mound, Texas, finding the most coverage for the lowest price is one thing every business owner has in common.
The brand you choose is far less important than finding a reliable company that can pay you in full and on time should you suffer a loss. That’s why we here at Freedom Insurance Group only partner with top-rated insurance providers to protect our clients. By assessing your coverage needs and shopping among our list of trusted insurance providers, we can provide your business with the best commercial insurance products on the market for the lowest price possible.
Remember, there are many different factors that go into crafting your premium. This is why we always encourage the practice of comparative shopping among a variety of insurance brands. We also understand that this endeavor can be time-consuming, however, the end result can mean saving on insurance costs and staying better protected. Freedom Insurance Group is here to help business owners save time and hassle by doing the shopping ourselves. Our 25+ top-rated insurance partners have a variety of insurance products and allow us to deliver real savings in a fraction of the time. On average, our agents help businesses save 40% on insurance premiums when switching. Get a commercial umbrella insurance quote or feel free to contact us today!
Common Commercial Umbrella Insurance Questions (FAQs)
Freedom Insurance Group is dedicated to helping business owners throughout Texas save money and stay protected. We are here for you and your company, proudly serving as a resource to help people like you navigate the world of commercial insurance. If you have questions about how commercial umbrella insurance works or any other questions regarding your business’s insurance coverage, feel free to ask one of our agents. You’ll receive expert advice and viable solutions for the best protection at the lowest cost.
Of course, some questions come up more than others. We hear a lot of inquiries, but below are some of the most common questions regarding commercial umbrella insurance. They are a great guide on where to get started in understanding some of the basics regarding a commercial umbrella policy.
A commercial umbrella insurance policy is an extra layer of protection when losses exceed the limits of your other commercial policies. Your umbrella coverage can help you pay to restore property damage, legal fees, and medical expenses following a loss.
The cost of your commercial umbrella insurance policy in Texas will depend on many factors. Most small businesses can receive $1 million in protection for only a couple of hundred dollars per year. Others may pay as much as $1,000+ per year for the same protection. These costs will vary from industry to industry and even business to business. You can get a free, accurate commercial umbrella insurance quote using our easy-to-use online tool to better determine how much your specific company will pay for protection.
Commercial umbrella insurance is important for businesses to protect against liability issues and losses that exceed other forms of insurance. Many insurance policies such as general liability or commercial auto will have policy limits. If your company is at fault for a loss that is so large your other insurance coverages are not able to cover them in full, your business will be on the hook. Paying large sums of money due to liability isn’t ideal for any business and a commercial umbrella insurance policy helps you safeguard against such scenarios.
It’s no secret that the cost of doing business is going up across many industries. Many things are growing in cost and that includes the price of labor, building materials, supplies, legal fees, and medical expenses. This is why a commercial umbrella insurance policy is so important. Your policy will help you mitigate paying out of pocket during a substantial loss that may cause your other policy limits to be reached sooner than you think.
No, a commercial umbrella insurance policy is not required in the state of Texas, but the affordable nature of such coverage to provide $1 million+ in protection makes it an attractive solution for any business.