Umbrella Liability & Excess Liability Insurance
8am - 7pm CST
|
888.466.8868
|
Monday - Friday

UMBRELLA LIABILITY INSURANCE & EXCESS LIABILITY INSURANCE

Introduction: Umbrella Liability & Excess Liability

Introduction: Umbrella Liability & Excess Liability

Small-business owners usually cringe at the thought of spending more money on insurance, but most don't realize how quickly the can blow past their policy limits. One major car accident, massive product recall, or nasty lawsuit, and suddenly they are paying lawyer fees or hospital bills out of their own pockets.

It's times like these when an Umbrella Liability or Excess Liability Insurance policy can seem like the smartest investment they ever made. These policies can be applied to certain other insurance plans when their limits have been surpassed.

What are Umbrella Liability & Excess Liability Insurance Policies?

What are Umbrella Liability & Excess Liability Insurance Policies?

Think of Umbrella Liability Insurance as a "safety net" when the following policies have exceeded their limits:

  • General Liability Insurance.
  • Commercial Auto / Hired and Non-Owned Auto Insurance.
  • Employers' Liability Insurance.

Though your client pays a single premium for Umbrella Liability, it can be applied to all three policies. When an underlying policy's limits have been reached, your client can make a claim on their Umbrella Insurance to cover the additional amount owed.

For instance, if your client has a General Liability policy limit of $1,000,000, but is found liable for $1,650,000 in damages, they would have to come up with the difference on their own. However, if they invested in Umbrella coverage, this policy can cover the extra $650,000.

Excess Liability works much the same way as an Umbrella policy. It pays the remaining balance when one of those three policies listed above comes up short. The difference is that Excess Liability can only be applied to one underlying policy.

One more important note: neither Umbrella nor Excess Liability can be used toward your client's Errors and Omissions (E&O) or Professional Liability Insurance.

Lastly, both Umbrella and Excess Liability coverage can be purchased in increments of $1 million. Contact an Insurance Noodle agent for assistance in figuring out which policy fits your client's needs.

Who Needs Umbrella Liability or Excess Liability?

Who Needs Umbrella Liability or Excess Liability?

Considering how quickly a lawsuit or a costly repair can drain a bank account, all small-business owners would be wise to purchase Umbrella or Excess Liability for the added protection. That said, certain clients might need these products more than the average business owner. For example, your client may want to invest in one of these policies if they..

  • Need more coverage. Increasing the limits on individual policies is an expensive way to add coverage. If your client knows they need more insurance, but they also need to keep an eye on their bottom line, suggest an Umbrella Liability policy. It is the more cost-effective method for getting adequate coverage.
  • Work with high net-worth individuals. If a wealthy individual sues for lost wages and your client is found liable, the judgment could far outpace their coverage.
  • Employ drivers or rents vehicles. More drivers mean more chances for accidents. According to the National Highway Traffic Safety Administration, traffic crashes cost business owners $128,178 per injury. If your client can't cover that cost, they need the added protection of Umbrella or Excess Liability coverage.