Business Insurance: Umbrella Insurance Coverage for Business

Business Insurance:
Business insurance, to explain it in simple terms, is about paying a premium you can afford to cover possible costs you may not be able to afford. When you pay your insurance premium payments to the insurance company, you are taking a risk, in so far as there are no guarantees of getting your money back. On the other hand, if you suddenly have an accident or if your office catches fire and goes up in smoke or if someone files a successful claim against your business, you have the guarantee that the insurance company will cover the often stupendous costs involved. This is what is known as liability insurance and all businesses worth their salt usually insure themselves with different liability insurance policies like General Liability, Employers Liability, Hired and Non-owned Auto Liability and Automobile Liability. In addition to these insurance policies, you should also get an Umbrella Insurance Policy. This will provide an additional liability protection by extending the limits of your liability insurance protection. You will realize just how handy this is the event that your business should ever face a law-suit.

Having an insurance policy helps:
Legal fees and Lawyers' fees are no small matter and, depending on your business and lawsuit type, can even go into millions. If this happens, you will be mighty grateful you don't have to fish out the millions from your own pocket, especially if you don't have them and are required to forfeit your entire property and future inheritance to make ends meet.

Having business insurance coverage is not only a safety net against the unthinkable happening, but also necessary for conducting regular business transactions. For example, if you plan on renting your office premises, you will have to furnish an insurance certificate as a rent-money guarantee. So if you suffer a setback and your business folds up, the landlord doesn't get to share in your loss and miss out on the rent money.

Insurance coverage:
There is a difference between property insurance coverage and liability insurance coverage. The former is based on the estimated market value of your property. The latter value is hard to pin down. There is no way of knowing beforehand how much costs you are likely to ring up if you get landed with a law-suit or have an accident. Your general liability policies will not, of course, cover these costs. It is the business umbrella liability insurance that will provide the required extra coverage.

Umbrella Insurance:
The Umbrella Insurance Policy can protect you in the following ways -

• It kicks off where your other liability policies end and provides you with additional liability coverage.
• It covers claims that the other liability policies may not cover, like if you get yourself involved in the wrong end of cases to do with libel or slander.

Keep in mind though that Umbrella Insurance Coverage does not normally cover the following -

• Professional Liability Policies
• Product Recall Coverage
• Workers' Compensation Insurance
• Pollution
• War
• Terrorism

The premiums you are required to pay for Umbrella Insurance depend upon -

• The Insurance company that is offering the coverage
• The amount of coverage that you are buying
• Your personal reliability. If you're the sort that has a long criminal record and a short credit ranking, you will be saddled with hefty premiums, in the event the insurance company risks saddling themselves with you.

Most businesses, especially if they are likely to get targeted often by lawsuit-happy folks, play it safe by getting Umbrella Insurance Coverage in the range of $1 million to $5 million. The coverage usually carries a high deductible – that is, the amount of loss that must be crossed before the insurance company pays up – and you usually need to have other liability insurance polices, like home liability insurance and automobile liability insurance polices, that is equal to this amount. You should consider buying all your liability insurance from the same company, as this will make your financial tangles more manageable in event of disaster and you may otherwise also get some pretty good discounts on the premiums. It never hurts to ask.