Liability is one of the most important aspects of a business’ commercial insurance policy, as it protects against various dangers that may face your business from day to day. One of these dangers include injuries, whether on your business property or due to one of your business’ products.

Umbrella liability insurance can help cover the gaps left by your other liability policies.

Types of Business Liability

General Liability

General liability insurance is the most common type of liability insurance policies. Part of general liability insurance covers injuries a person may sustain on your business’ property. If someone trips and falls in your retail store, for example, general liability insurance can step in to provide compensation for the victim’s medical bills as well as protect the business itself against a related lawsuit.

Professional Liability

While professional liability may have more to do with incidents that cause a client to lose money, many of these accidents may include bodily injury, as well. Professional liability insurance may cover bodily injury caused by an individual or business’ professional services. If a yoga instructor or chiropractor causes injury to a client through their services, for example, related expenses may be covered under professional liability insurance rather than general liability insurance.

Depending on your industry, this may be referred to under different names. In the medical industry, professional liability insurance is generally referred to as medical malpractice insurance.

Products Liability

Products liability insurance can cover property damage and bodily injury caused by a product sold or manufactured by the business. This can cover medical bills and lawsuit issues if your business offers or generates products. Products liability can work for online businesses as well as those with physical locations.

Commercial Auto Insurance Liability

Many businesses use vehicles to transport equipment, products or people. In these cases, your business will need commercial auto insurance. Commercial auto insurance covers vehicles owned or used by a business for work purposes, including liability. Liability under commercial auto insurance covers bodily injury and property damage the driver for the business may cause someone else while operating the insured commercial vehicle.

Workers Compensation

Workers compensation is a different form of liability insurance, as it covers employees rather than clients or customers. If one of your employees is injured on the job, workers compensation can provide compensation for the employee’s medical bills, disability benefits, wage replacement and more.

How Can Umbrella Liability Insurance Help?

Umbrella liability insurance works as an “umbrella,” meaning that it does not cover only a single liability insurance policy, but several different liability policies. If your general liability insurance reaches its limit for a claim after an accident, umbrella liability will step in to cover the remaining expenses. For example, say a single lawsuit turns into $2 million in expenses but your professional liability insurance policy only covers $1 million. Umbrella liability insurance will fill the remaining $1 million.

This can also help in cases of commercial auto insurance accidents. Just as an umbrella liability policy can cover the liability under your <personal auto insurance policy>, it can also help cover additional expenses related to an accident with a commercial vehicle. This serves to both help further compensate a victim in an accident as well as offering higher limits of coverage for the business’ legal expenses in case of a lawsuit. This includes compensation for court fees, defense costs and settlement expenses.

You can add umbrella liability insurance to practically any package policy, such as a commercial package policy or business owners policy.

How Much is an Umbrella Liability Insurance Policy?

Umbrella liability insurance premiums are influenced by a lot of the same factors as other liability policies, such as your:

• Location
• Industry
• Coverage limits
• Deductible
• Claims history

While this insurance can be purchased on its own, it is usually added to another policy, which can influence how much you are paying for business insurance. If your business or industry has a history of liability claims, you may find your umbrella liability insurance premiums to be higher. A higher deductible may also save money on premiums, but it also means paying more out of pocket if you have to file a claim.

Be sure to speak with an insurance agent about any questions you have concerning your umbrella liability policy or needs. Injuries can range from minor to serious, and it is important that you have coverage in place so that everyone involved can receive the proper care they need.