Running a small business comes with plenty of risks. You’ve got your basic insurance, maybe a Business Owner’s Policy (BOP) or auto liability coverage, and you feel protected. But what happens when something bigger occurs? Something that pushes past your coverage limits?
That’s where commercial umbrella insurance comes in. It’s the backup your business didn’t know it needed – until it does.
Let’s say you have a BOP with a $1 million general liability limit. That sounds solid. But then a claim is filed for $1.5 million. Your policy only covers the first million. What happens with the other $500,000?
If you don’t have umbrella coverage, your business has to cover it out of pocket.
Commercial umbrella insurance fills that gap. It kicks in when your underlying policies hit their limits, giving you extended protection and helping you avoid financial disaster.
Faulty Wiring – Tech Manufacturer
A small tech company makes parts for smart devices. One of their parts turns out to be defective and causes devices to explode. A huge claim rolls in. Their general liability policy covers $2 million, but it’s not enough. Without umbrella insurance, the remaining costs could shut down the company.
Delivery Gone Wrong – Florist
A flower shop employee causes a serious motorcycle accident while making deliveries. The injured motorcyclist sues for millions. The business’s auto liability coverage gets maxed out fast. Their umbrella policy covers the rest, saving the florist from ruin.
Hot Coffee
In a busy coffee shop, a server spills hot coffee on a customer, causing third-degree burns and permanent scarring. Medical bills, legal fees, and emotional distress pile up into a claim that exceeds their general liability coverage. With umbrella insurance, the café avoids financial collapse.
Apartment Security Fail – Landlord
At an apartment building, a faulty back door lock leads to an intruder assaulting a tenant. The victim sues the building owner for negligence. It’s a multimillion-dollar case. Without umbrella coverage, the landlord could lose everything.
Salon Slip-Up
A hair stylist accidentally trips a senior client with a hairdryer cord. The woman’s injuries are serious, and she sues for nearly $2 million. The salon’s general liability policy only covers $1 million. Without umbrella coverage, they would be responsible for the rest.
If you already have business insurance, adding umbrella coverage is simple. And when you look at the numbers, it’s a small investment compared to what it could save you.