Umbrella policies help cover your business for catastrophic losses, providing protection above your primary commercial-insurance policies. With the rising medical and legal costs associated with accidents, third-party lawsuits, and other severe loss exposures, it’s important to start a conversation with your independent insurance agent about umbrella coverage--and soon.
But not sure where to start? Here are five must-ask questions to ensure you’re getting the coverage you need to keep your small business in the black when a catastrophic accident occurs.
1. How much coverage do I need?
This answer varies from business to business, depending on the size and value of the operation. Keep in mind that brick-and-mortar storefronts are at extra risk; it only takes one customer tripping over a power cord, frayed rug, or merchandise rack to potentially put your business at risk. Work with your independent insurance agent to ensure you have enough coverage to handle expenses related to third-party lawsuits.
2. When will I need umbrella coverage?
Don’t assume that your business should be a certain size before purchasing. It’s an unpleasant truth that your business might never reach that hypothetical milestone without the right coverage. An accident is just as likely on your first day of business as it is years into your operation. Cover now, so you can grow safely.
3. What makes some umbrella coverage providers better than others?
Not all insurance providers are created equal and not all of them navigate the scale of umbrella claims as well as others. Make sure your agent connects you with a provider that understands the risks associated with your type of business, knows the ins and outs of managing large legal and medical scenarios, and is dedicated to making certain you’re getting everything you need within the scope of your coverage.
4. What else can my umbrella provider do for me?
Some insurance providers add value by helping you proactively identify and mitigate risk, providing consulting and more. Liberty Mutual’s crisis management support, which offers up to $250,000 in expenses for PR consulting to help remake your post-accident image after a catastrophic accident, is a great example. Ask your agent which providers can do more than simply cover you.
5. Can I afford umbrella coverage?
At the risk of sounding cliché, can you afford not to have it? The truth is that a single accident can be very costly to your business; and in an extreme case, can be enough to put you out of business. The cost of umbrella coverage is low--a fraction of the amount you pay to acquire your primary commercial coverage. You’ve invested your emotional, physical, and intellectual efforts into your business; it’s worth making this reasonable investment to protect what you’ve built so far--and what you’ll build in the future.