Do You Need An Umbrella Insurance Policy?

If you're feeling as though your business is under-insured, you might want to consider the addition of an umbrella insurance policy. An umbrella insurance policy is a type of "catch-all" policy that is designed to cover the gaps between your existing policies, in addition to catching the excess. Read on for more information about this type of business insurance.

Umbrella Policies Pick Up Where Other Policies Leave Off

An umbrella policy creates an additional policy that is tapped when other policies are maxed out. Consider a scenario in which you have $50,000 in property insurance. If you end up with a claim of $75,000 against your property insurance, you won't have coverage for $25,000 of the claim. With an umbrella policy, the umbrella policy would pick up that remainder.

However, umbrella insurance does more than just extend property insurance; it also extends other insurance policies. Thus, it's more useful to a business than simply increasing your property insurance coverage.

Umbrella Policies Are Good at Reducing Risk

Businesses that are new or that are in high-risk environments may want an umbrella insurance policy because it may not be possible for them to predict their insurance claims. An umbrella policy also works as gap coverage for insurance claims that are not picked up by other insurance policies. Due to this, it's particularly useful for companies that can't anticipate their own insurance needs.

Umbrella Policies Aren't Just for Businesses

Umbrella policies are also available for individuals. Business owners may want to get their own personal umbrella insurance policies as well, especially if they have a high net worth. A personal umbrella insurance policy is usually fairly affordable even for high amounts of coverage. Business owners could discover that they are liable for issues with their business, or may experience other personal legal issues related to their business.

Umbrella Policies Often Rely on Other Overage

Finally, an umbrella policy is usually only available if you already have substantial insurance coverage. However, the better covered you are, the more affordable an umbrella insurance policy will be. Before you make a decision on whether you want an insurance policy, you should look into quotes and find out whether you qualify for the best rates.

Many small or medium-sized businesses may not need umbrella insurance, but having more insurance than needed is safer than having less. If you still aren't sure what types of insurance policy you need, you may want to call a business insurance consultant.