Lowering Your Liability

Lowering Your Liability
What if you were sued for an accident on your property? Or you were found at fault in a major traffic accident? An umbrella policy could help you keep you covered.

Umbrella liability insurance is relatively affordable and can be easily coordinated with your existing insurance policies.

As far as insurance goes, an umbrella or excess liability policy goes the extra mile. If you’re looking to bolster key policies, an excess liability policy can provide you with additional coverage at reasonable rates. Excess liability basically extends the coverage of your underlying policies, which might include general liability, commercial or business Auto policies, and possibly employers liability.

Here’s how it works: Let’s say you have a $1 million business auto policy with hired and non-owned auto coverage, which protects you if you have an employee using his or her personal vehicle to run a business-related errand. In addition, you have a $1 million excess liability policy. Unfortunately, the employee has an accident on the way to the office supply store, hitting another vehicle causing injury to a third party and your business is held liable. If the injured person is awarded $1.5 million in damages for hospital and other expenses your business auto policy covers the first $1 million and the excess liability covers the remainder.*

The real value of an excess liability is that, with one policy and for a relatively small premium, you can add coverage on top of a number of underlying policies. It won’t cover more specialized policies, such as professional liability or errors and omissions policies, but it does cover those key areas of common, general liability.

There are no hard-and-fast rules regarding the pricing of excess liability coverage, but it is typically inexpensive, depending on the type of business you own. An office-based business might pay, for example, between $350 and $500 per year for each $1 million in coverage.

When you put it in perspective, an excess liability policy is really about peace of mind. Furthermore, the premium is generally low and it may be a tax-deductible business expense.