Have you ever wished you could higher limits of liability insurance but felt it was too expensive? If so, you may find that purchasing an umbrella policy is the perfect solution. Not sure how this works? Read on and learn about umbrella insurance policies and how they can benefit you and/or your business.
Umbrella insurance is a type of insurance that offers you extra liability insurance. It protects you and your assets in case you’re sued for a large amount – an amount higher than what your regular policy covers. Umbrella policies provide you with additional liability insurance on your homeowner’s, auto or boat insurance policies. It does not provide you with additional insurance to replace your home or auto in the case where they were destroyed. The umbrella policy only provides additional liability insurance.
Although not just for business owners, umbrella policies are often very beneficial to business owners. Here’s how they work. Say you own a business where someone gets injured. They sue you for $1,000,000, and you lose the case. You have a commercial insurance policy with a $500,000 liability limit and an umbrella policy for $2,000,000.
Your commercial policy will only pay out the$500,000 because that’s the limit. The remaining balance would come out of your umbrella policy. Without the umbrella policy in place, you would be liable for the additional $500,000 that your regular policy didn’t cover. Considering that about 13 percent of personal injury liability lawsuits settler for more than $1 million, umbrella policies seem like a smart choice for a small amount of money. An umbrella policy for $1 to $2 million dollars can typically be purchased for under $400 per year.
Umbrella policies are not just used as additional liability insurance for businesses. They can also be purchased as additions to your home or automobile policies. They’re good for any insurance policy that offers liability insurance. Umbrella policies are popular because they’re relatively inexpensive. For example, it is much cheaper to purchase an umbrella policy for $2,000,000 than it would be to pay for that much liability insurance on your regular insurance policy.