An umbrella policy was created to provide additional coverage when a lawsuit brought over injuries and/or property damage that you cause exceeds the liability limits on your business insurance policy. This can provide additional limits of insurance for the policies that are listed as underlying on the Umbrella. In some cases, it can provide insurance where there was no underlying coverage because it did not fit into a specific policy.
Umbrella policies are a good investment as it can provide additional limits to your business, auto, workers compensation and sometimes Directors & Officers policies without taking a huge bite out of your wallet. Coverages and limitations apply by individual carriers; but your Quest Insurance professional will guide you through this process.
An umbrella policy has three advantages. It provides additional lawsuit coverage of $1 million or more. It provides added coverage for defense costs, which can easily amount to $100,000 or more. And finally, it provides liability coverage for some lawsuits not covered by your underlying business insurance policies. Examples include if you’re sued over an incident involving a slip and fall at your business location, a car your employee rented in Europe while traveling for work, or even your work on a nonprofit board of directors.
Everyone concerned about losing business income or assets in one large lawsuit needs an umbrella policy.
You can’t control whom you might injure. If you injure, for example, the CEO of a large corporation, a professional baseball player or a doctor, you would owe for lost wages, medical bills, and pain and suffering. The lost wages alone for those types of people, if they can’t work for 10 years, could start anywhere from $2 million to $3 million and run up to as much as 10 times that amount. Medical bills might be about $500,000. And then, there is compensation for pain and suffering.