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Small businesses are the backbone of the American economy. According to The U.S. Small Business Administration, there are 31.7 million small businesses in America, and they account for 47% of all jobs in the country.
These businesses face a wide range of risks every day. Many small business owners are surprised to find out that their carriers’ general commercial liability insurance does not cover all of these risks. This often results in a total loss for the company, especially if a large liability claim catches it off guard. Here we will talk about the most common types of risks that small businesses face and how they can be financially protected.
Commercial umbrella insurance is a policy that acts as an extension to your existing commercial liability policies. In addition to covering damages, lawsuits, and legal costs from general negligence claims as part of your existing carrier’s policy limits, it can provide additional liability protection beyond your existing limits. This can help prevent a financial crisis in the event of a catastrophic loss.
Let’s take a look at an example of a situation where small businesses need commercial umbrella insurance.
In the event of a large liability claim, your commercial insurance policy will likely not cover all of the costs associated with the settlement. This is most often the case for small business owners who have a hard limit on how much they are insured. For example, if you have a $1 million commercial liability policy, but you end up with a $2 million settlement resulting from a large lawsuit, your carrier will only pay out the first $1 million. Your umbrella insurance policy would pick up an additional 1 million dollars subject to the limits of your policy.
Commercial umbrella insurance is an essential product for small businesses. It can provide additional liability protection and help you avoid a financial crisis in the event of a large claim in Oklahoma City, OK. Call Freeland Insurance to learn more today.