Help protect your business with umbrella insurance

Think of umbrella insurance as extra coverage. Your current business insurance policy package—which might include coverages such as general liability, employer liability, and commercial auto—has limits in what it covers and how much it pays.

Business umbrella insurance is an optional coverage that helps cover costs you incur that exceed your liability coverage limits. This is especially important for your business if you experience a large financial claim or judgment against you.

Your insurance policy only covers a pre-determined amount of money against claims. If the costs resulting from these claims exceed your policy limits, you're responsible for the remaining dollar amount. If that's a large figure, it can drastically affect your bottom line and possibly shut down your business.

The following examples show how umbrella insurance can help, providing extra protection if:

• An employee alleges that company negligence resulted in injuries or illnesses suffered at work

• An employee causes a serious motor vehicle accident while driving a company car

• Your company faces a large court judgment

Recent court judgments have hit businesses especially hard. While prevalent in the commercial trucking sector, cases involving nuclear verdicts—court judgments involving a jury award of $10 million or more—are on the rise across many industries, including the horticultural industry.

Among the reasons these types of verdicts are increasing: jury member sentiment against businesses and a rise in litigation financing—where a third party finances the lawsuit in exchange for receiving a percentage of the verdict award. The expectation in financing these lawsuits is the business will be forced to pay a large amount in a jury award, and the third party will see a windfall as a result.

In general, there's a perception that companies have deeper pockets and it's their responsibility to pay a large sum for their mishaps.

As with all insurance coverages, the cost of umbrella insurance depends on your situation, including:

• The size of your business

• The amount of coverage you seek

• The types of risk you face

Your cost will also vary based on the type of policy you currently have in place and what coverage limits you're comfortable with.

Typically, an insurance provider will discuss this option with you from the start if it's part of their portfolio. If the insurance provider doesn't bring it up, ask.

Umbrella insurance might not be an attractive option for you if you're just starting out and don't have the financial means to add additional coverages to your premium. On the other hand, is going without that coverage a risk you want to take with your business?

You've invested a lot in your company. Umbrella insurance can help protect your investment and help ensure your company can withstand a large financial setback.

If you have further questions about commercial umbrella insurance, we can help.

Learn about three critical types of business insurance coverage that can also play major roles in helping protect your horticultural company.

Renewing your business insurance is an important annual task. Use our business insurance renewal checklist to help make sure you're properly covered.

In our 2021 horticulture industry trends article, find out what insurance coverages business owners like you look for and where costs continue to rise.