Massachusetts businesses have access to substantial amounts of coverage through primary insurance policies, but there’s normally an upper limit to how much protection these policies will afford. When businesses want more protection than a primary policy makes available, commercial umbrella insurance may offer the additional coverage that’s desired.
Commercial umbrella insurance is a supplemental type of commercial liability insurance. These policies normally serve as secondary policies, often providing coverage only after any applicable primary coverage is exhausted. The primary policies that a commercial umbrella policy supplements are also called “underlying policies.”
There are many businesses in Massachusetts that could benefit from having business umbrella insurance in place, for almost any business could be named in a liability lawsuit and these suits can be expensive. Should the legal costs and settlement associated with a covered lawsuit exceed the limits of a primary policy, whether a business has an umbrella policy might be the difference between surviving the lawsuit and declaring bankruptcy.
The following are some specific examples of businesses that might want to consider purchasing a business umbrella insurance policy:
Organizations that are unsure whether business umbrella insurance makes sense for them should speak with an insurance agent who specializes in this type of commercial coverage. A specialized agent will be able to help organizations appreciate their full risk exposure and determine whether that exposure justifies purchasing supplemental liability protection. If it does, an agent can also help organizations select whatever business umbrella policy best meets their particular needs.
Business umbrella policies and excess liability policies are both forms of supplemental liability insurance, and each will provide secondary liability protection in the event of a covered claim that exceeds any underlying coverage. The policies differ from each other in one important way, however, and this difference has two significant implications.
Business umbrella policies typically come with their own terms and conditions, while excess liability policies normally adopt those of an underlying policy that they supplement. Excess liability policies are sometimes referred to as “follow form” policies because they simply copy the terms and conditions of a primary policy in most situations.
As a result of this difference, business umbrella policies frequently can supplement multiple underlying policies at once and might even cover claims that underlying policies exclude from their protections. Excess liability policies, in contrast, usually supplement only one underlying policy and don’t add protection for claims that policy doesn’t cover. Aside from increased limits, excess liability tends to offer little (if any) additional protections.
As is the case with many other insurance policies, businesses often can select from a range of limits when purchasing a commercial umbrella policy. In most cases, the range includes high limits that offer millions of dollars worth or protection. An agent can help businesses determine exactly what limits are available to them.
For help finding commercial umbrella insurance that will give your business robust protection, contact the independent insurance agents at Roger Keith & Sons Insurance. Our agents will help you assess your Massachusetts business’ risk exposure and then find a policy that offers solid coverage against many of the potential liability risks you face.