Get the Commercial Umbrella Insurance You Need In North East Ohio
If you own or operate a business in the North East and other parts of Ohio, you’ll have since noticed that there are lots of insurance policy options available for you. For example, you can take out commercial general liability (CGL) insurance, employer’s liability insurance, commercial auto insurance, and other similar policies.
But while the above-mentioned policies are very necessary for a business, they are far from sufficient. One incident, such as a lawsuit, can result in a liability claim that is way in excess of what these policies can cover. One way to easily cope with such calamitous situations is by purchasing Ohio commercial umbrella insurance coverage.
What Is Commercial Umbrella Insurance?
Commercial umbrella insurance is a type of insurance that provides additional coverage or protection when the limits of underlying policies (e.g. commercial general liability, employer’s liability, and commercial automobile liability) are exceeded. It is usually regarded as a kind of excess liability insurance, though both are not exactly the same. An excess liability insurance policy provides coverage for one liability policy, while a commercial umbrella cover provides coverage for multiple liability policies.
In other words, a commercial umbrella insurance policy sits atop your other insurance policies to provide an extra layer of financial protection that goes beyond the coverage limits of these other policies.
For example, if your Ohio-based company is sued for USD 500,000, but its liability coverage is only USD 350,000, the remaining USD 150,000 can be offset by your Ohio commercial umbrella insurance policy, depending on its coverage limit.
How Commercial Umbrella Insurance Works
Commercial umbrella insurance works like any other conventional insurance policy. First, the policyholder incurs a qualifying financial loss. Then he or she files a claim with the insurance company that provided the policy. Lastly, the insurance company provides compensation for the financial loss based on the policy’s limit.
But the determination of what constitutes financial loss is where umbrella insurance differs from other types of insurance. For an umbrella policy to come into effect, the cost of a claim must be greater than the limits of other policies covering the incident.
Who is a Commercial Umbrella Policy For?
You should consider commercial umbrella insurance if there is a high probability that your business may exceed the limits of its present liability policies. It is also ideal for businesses that own commercial property that hosts public gatherings because of the risk involved in working with people.
If a company does business on a rented property, then a commercial general liability policy may not be comprehensive enough because of the higher probability of third-party property damage. Moreover, the cost of fixing business property that does not belong to you is often significantly higher. A company that offers potentially injurious products or services could equally use an umbrella policy.
Umbrella insurance is also necessary for a business involved in transportation and logistics because a single accident can exceed the limit of your commercial auto insurance coverage. Other companies in high-risk industries, like construction, entertainment, sports, law, alcohol, health, etcetera, should guard against costly litigation that can wipe away their liability limits by taking up commercial umbrella insurance.
The same scenario plays out for companies that regularly work on properties that belong to others. For instance, businesses that engage in product installation and maintenance may need extra coverage than provided by a commercial general liability policy should something go wrong, e.g., property damage or third-party injury.
The two major factors that play a huge role when it comes to the need for commercial umbrella insurance are:
The industry a business is operating in
The company’s frequency of face-to-face contact with people
In a nutshell, the popular rule is: the higher the risk of third parties making liability claims against a company, the more the company needs commercial umbrella insurance.
Large Limits Of Liability
One of the important determinants of the adequacy of the protection offered by an insurance policy is the extent of the policy’s limit. As noted earlier, Ohio commercial umbrella insurance enables you to enjoy coverage above and beyond the limits of your other underlying policies.
In a lot of cases, a commercial umbrella insurance policy limit starts at USD1 million per occurrence limit and USD2 million aggregate limit. Ellerhorst Russell Insurance Agency offers a large liability limit that can rise to as much as USD 5 million. Not only that, clients can enjoy even larger limits subject to underwriting approval.
Excess liability coverage usually includes sub-limits. For instance, a commercial general liability policy can often come with a sub-limit for damage to rented property. Insurers use such strategies to provide wide coverage while excluding risks that they do not intend to cover.
Because of the above and other complexities that are usually attached to excess liability and commercial umbrella insurance policies, it is vital to speak with an insurance authority such as Ellerhorst Russell so that you’ll be very familiar with the size of your policy limits.
What Does A Commercial Umbrella Policy Cover?
Lawsuits can be costly, especially for a struggling business. An integral aspect of Ohio commercial umbrella insurance is the provision of legal defense to policyholders. So if an accident, say in North East Ohio, leads to legal action against your company, a North East Ohio Commercial Umbrella Insurance policy will help you cover costs that are over and above your liability policy.
For instance, assume a member of your staff driving a rented vehicle is involved in an accident that injures the occupants of the other vehicle involved in the accident. Subsequently, your company is sued because of the injuries, and a USD 1.9 million judgment is awarded against your company. But there is a problem because your auto insurance policy limit is only USD 1 million, meaning that you cannot account for the excess USD 900,000. With an umbrella policy, this excess cost can easily be taken care of without the need to pay out of pocket.
Personal Injury Protection
Your umbrella policy can become operational when you reach the limit on the underlying liability coverage in your auto, homeowners, renters, or co-op/condo policies. Commercial umbrella insurance can help cover medical bills or legal costs if your company is held liable for any kind of personal injury. Personal injury may include:
Intentional damage to reputation
Violation of privacy
Illegal detention or incarceration
Injury can also come from advertising-related situations, as is the case with copyright infringement and the misappropriation or theft of creative and ingenious advertising ideas, among others.
As previously noted, commercial umbrella insurance is often used interchangeably with excess liability coverage, though they are not strictly the same. Apart from the dissimilarity example earlier offered, another good example is in the coverage scope of both. Unlike the usual excess liability policy, a typical Ohio commercial umbrella insurance will provide worldwide coverage (meaning that no matter the geographic location of an accident or damage incident, you remain covered by your policy).
So another distinct advantage of purchasing commercial umbrella insurance is the opportunity of enjoying a wider coverage territory than is possible in other underlying liability policies. The geographic coverage provided by excess liability insurance will often not be wider than that of their underlying policies, and they are usually meant to abide by the terms of the policies over which they are excess.
Blanket Contractual Liability
In blanket contractual liability insurance, coverage is extended to all contracts in which liability is borne by the insured. It is most commonly applied in situations when a business is working with a third party, such as when that third party is using property belonging to the business. In North East Ohio (and in most other jurisdictions), taking out a blanket contractual liability does not prevent a company from also adding another liability policy, such as North East Ohio commercial umbrella insurance.
Among the varieties of this kind of insurance are blanket broad form contractual liability insurance and blanket limited form contractual liability insurance. Contractual liability coverage was included in the 1973 and earlier CGL policies by endorsement. Also, the blanket broad form type of contractual liability coverage is included in the basic provisions of the 1986 and later CGL forms.
Blanket Contractual Liability
Liquor liability Endorsement offers a protective cover to businesses involved in the sale of alcohol. This may include liquor stores, breweries, grocery stores, pubs, wineries, restaurants, bars, convenience stores, and more.
Among the costs, you can cover with a liquor liability policy are fees associated with lawsuits, medical expenses due to bodily injury, and damage to property by an intoxicated individual who bought or got the intoxicant from the insured. In some jurisdictions, it is mandatory by law to take out a liquor liability insurance policy before being granted a liquor license.
Any business in North East Ohio that deals in alcohol is susceptible to liquor liability and could benefit from a North East Ohio commercial umbrella insurance coverage.
Care, Custody, Control
Care, custody, and control are excluded from commercial general liability and commercial auto insurance policies. That is, both policies do not include coverage for someone else's property that is damaged while in your possession.
The care component of the term means that it is the policyholder’s duty to oversee the property for a particular period. The custody component means that the safety of the property is the responsibility of the policyholder. Lastly, the control component signifies the power the policyholder wields over the property.
What Commercial Umbrella Insurance Does Not Cover
Commercial umbrella insurance usually does not cover the policyholder’s property insurance claims, even if it is commercial property insurance. In other words, it will not cover a policyholder’s damage to his or her own property because it is a liability policy. It will only cover you if you’re held responsible for damage to someone else’s property.
It may also not cover errors and omissions (E&O) insurance. These are just some instances. For more information about what Ohio umbrella liability insurance covers and does not cover, you may want to chat with Ellerhorst Russell Insurance Agency today.
How Much Does Commercial Umbrella Insurance Cost?
Ohio commercial umbrella insurance policy costs may vary according to several factors. This implies that it is essential to carefully review all policy exclusions before making a decision.
Most Ohio commercial umbrella insurance policies include a kind of deductible known as self-insured retention (SIR). With SIR, payments are structured to take care of each occurrence, meaning that coverage becomes more affordable for the policyholder. Below are some variables that can help determine the cost of commercial umbrella insurance:
Size of the business
Level of risk of property damage or third-party bodily injury
Difference Between Umbrella Insurance and Personal Umbrella Insurance
A personal umbrella insurance policy offers an additional layer of liability protection on top of existing coverage, such as homeowners insurance or auto insurance while a commercial umbrella insurance policy offers an additional layer of protection for commercial insurance policies, such as commercial general liability insurance and commercial auto insurance.
In summary, commercial umbrella insurance is for business operations and facilities, while personal umbrella coverage is meant for individuals and households/families.
Commercial umbrella insurance is an essential source of protection that supplements the limits of underlying policies such as commercial general liability, employer's liability, and commercial automobile liability. A commercial umbrella policy's coverage is useful when the limits of the underlying insurance are exceeded.
The features of a typical commercial umbrella liability policy include large limits of liability, legal defense, personal injury protection, worldwide coverage, blanket contractual liability protection (for both written and oral agreements), liquor law liability, care, custody, and control coverage, and many others.
Whether you need personal or commercial umbrella insurance coverage, Ellerhorst Russell Insurance Agency will closely partner with you to understand your needs and make sure you are properly protected.