Insurance Myths

Myth #13: I’m self-employed and don’t have employees. Workers' Comp Coverage isn’t available.
Workers' Compensation insurance laws have changed. In the past, you couldn’t get coverage if you didn’t have employees, but that’s no longer the case. You can protect yourself from on the job injuries with Workers' Comp.

Umbrella Insurance (Business)

What is business umbrella liability insurance?
Designed to give you an extra layer of security, business umbrella liability insurance provides supplementary coverage for costs associated with lawsuits, legal fees and settlements.

Additionally, business umbrella liability insurance can cover bodily injury and personal property claims that are not covered by your other liability policies (such as property, auto and workers compensation).

Who generally purchases business umbrella liability insurance?
All companies that would benefit from additional liability protection.

Why buy business umbrella liability insurance?
Let's assume that your business was named in a liability claim that required $4 million to settle, and the limit of your general liability policy is $2 million. Here's what would happen:

  • Your insurance company would pay $2 million.
  • Your business would be responsible for the other $2 million.
A $5 million business umbrella liability insurance policy would have covered the rest of the settlement (the remaining $2 million) and left your business with $3 million in extra liability protection.

What does business umbrella liability insurance cover?Lawsuits, legal costs, court awards and out-of-court settlements can reach staggering sums, far exceeding the limits of your current general liability policy. Business umbrella liability insurance can help to cover costs that your other policies cannot.

Most business umbrella liability insurance policies exclude employment practices liability, professional liability, product recall coverage, workers' compensation insurance and coverage for asbestos-related claims, pollution, war and terrorism.

Insurance Coverage Limits
Business umbrella liability insurance policy limits are typically within a range of $1 million to $5 million and are appropriate for business owners who have significant assets or may be especially susceptible to lawsuits.

Two Kinds of Insurance

  • The amount that exceeds1 the maximum coverage limits from your primary business liability or business auto policies
  • Additional coverages2 not provided by your primary business liability or business auto policies

Property Insurance vs. Liability Insurance
The difference between property and liability risk is that you can put a value on the property you have at risk, but there is no way to predict the amount of damages you could be required to pay as the result of a catastrophic accident. If, for example, you were found liable in an accident that injured many people, the damages could be in the millions of dollars.

Business Umbrella Liability Insurance and Your Home Business
Business umbrella liability insurance only provides extra coverage over what the original base policy covers. If your home business is not covered in the general liability or homeowners policy, the umbrella won't cover it either. However, if you have designed your business insurance program to protect your home business, then business umbrella liability insurance will offer the added protection you just might need.

Get protection recommendations and straightforward advice for your business by speaking with a Morris Insurance Business Insurance Planner today.