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Do You Need a Commercial General Liability Umbrella?

Do You Need a Commercial General Liability Umbrella?

The purpose of business insurance is to protect your income-generating enterprise from a slew of potential legal and financial issues. Commercial General Liability policies are no different. These policies provide coverage in the event of four situations:

  1. Bodily injury claims
  2. Property damage claims
  3. Personal injury claims, and
  4. advertising injury claims (including slander or other forms of false advertising)

The way that regular CGL works is that a maximum payout is established with the insurer for an overall coverage period, as well as the highest amount they'll pay per occurrence. But what happens if you have $1,000,000 in coverage, but are then successfully sued for $2,500,000? It means that while your insurance provider will cover the first million in damages, the other $1,500,000 are your responsibility.

This is not a place you want to find your business, stuck between the proverbial rock and hard place. After all, isn't this exactly the circumstance you were hoping that business insurance would eliminate?

The good news is that you can minimize the damage done in the event of a significant lawsuit buy purchasing what is known as Commercial General Liability Umbrella Insurance. This policy offers coverage where your regular CGL policy left off. More that that, it adds in additional coverage for various liabilities that aren't traditionally covered under regular CGL or business insurance. 

Indicators You Need An Umbrella
In the real world, when are umbrellas needed? When it rains. Although you only open your umbrella when it's raining, you still keep it handy, just to be on the safe side. You never know when sunny skies will turn dark and forbidding. It's the same way in the business world. Fortunately, there are a few common indicators to look for to determine a greater need for umbrella liability coverage in your business.

  • If you live in a state where lawsuits entail large sums, umbrella liability coverage is a good add-on to existing business insurance
  • If you work in an industry prone to lawsuits, product-defects or injuries, it's safe to add an umbrella to your Commercial General Liability coverage
  • Find out what the average damages are in business lawsuits and subtract your current CGL coverage. Whatever is left could be what you're left footing the bill for? If you aren't comfortable with that number, you need umbrella liability insurance!

In addition to purchasing umbrella coverage to supplement your Commercial General Liability insurance, it also helps to attempt to lower your risk of being sued in the first place. That means taking steps like ensuring high quality control standards, meticulous record-keeping, proper training for all employees and talking with your insurance agent on simple steps you can take to lower your premiums.

Driscoll Insurance & Financial Services, Inc. is a company offering a seasoned team of dedicated experts in the world of life insurance, Commercial General Liability policies and business insurance. Every one is ready to explain your current situation and future needs in simple, plain English. Visit us today to take advantage of the Driscoll Difference.

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