Commercial Umbrella Coverage: Why Does Your Business Need It?

Commercial Umbrella Coverage: Why Does Your Business Need It?

December 14, 2023

What is Commercial Umbrella Coverage?

Commercial Umbrella Insurance is a type of liability insurance that supplements your basic liability policies, such as your commercial auto, business owner's policy (BOP), or employers' liability. This policy covers your business for catastrophic issues that threaten its survival.

Your Commercial Umbrella Coverage kicks in when the cost of a lawsuit exceeds the limits of your primary coverage. It's akin to a safety net, there to catch your business when the unexpected happens, and your existing policies aren't enough to cover the costs.

The Importance of Commercial Umbrella Coverage for Utah Businesses

Utah, known for its thriving industries and entrepreneurial spirit, hosts a plethora of businesses, each with their unique risks. In a state where businesses are booming, it's essential to consider the unforeseen - accidents, lawsuits, and more. That's where Commercial Umbrella Coverage comes in.

Utah has its unique set of laws and regulations that govern businesses. These laws can sometimes lead to lawsuits that cost significantly more than the limits set by your primary business liability insurance. Having Commercial Umbrella Coverage ensures that your Utah business can survive such costly lawsuits and unexpected accidents.

Let's imagine your business is sued for $1.5 million due to an accident on your premises, but your general liability policy has a limit of $1 million. Without Commercial Umbrella Coverage, you'd have to pay the remaining $500,000 out of pocket, which could be financially devastating.

However, if you have a Commercial Umbrella policy with a limit of $2 million, it would cover the remaining $500,000, thereby saving your business from potential bankruptcy.

Frequently Asked Questions

Q: Does every business in Utah need Commercial Umbrella Coverage?

A: While not legally required, Commercial Umbrella Coverage is highly recommended for businesses, especially those that face significant risk exposure, such as construction, food services, and healthcare.

Q: How much Commercial Umbrella Coverage should my business have?

A: The amount of coverage needed depends on the nature of your business and the level of risk associated with it. It's best to consult with an insurance professional to evaluate your business's specific needs.

Q: Can Commercial Umbrella Coverage replace my existing liability policies?

A: No, Commercial Umbrella Coverage supplements your existing liability policies. It kicks in when the costs exceed the limits of your primary insurance.

Commercial Umbrella Insurance in Moab, Utah

At Central Utah Insurance, we understand the unique needs of Utah businesses. We're here to help you navigate the world of business insurance, ensuring you're adequately covered for all eventualities. For more information about Commercial Umbrella Coverage or any other insurance needs, feel free to contact us. We're here to help!