While an Umbrella insurance policy is good for an individual or a family, it is essential for a business.

So let’s start with the basics. What is Umbrella insurance? An Umbrella insurance policy covers a business, up to the coverage value of the policy above the maximum limits for each of the covered risks; In addition, it covers some other risks for which there is no specified coverage, either through a rider in one of the insurance policies or a separate insurance policy.

Risks that are covered above the insurance policies or riders that most companies have. Again, these are risks that you probably already have insurance for.

Personal Injury – For example, a visitor slips and falls in your lobby.

Damage to personal property, for example, a vehicle colliding with another, when one of the vehicles is yours.

Real estate coverage: damage to building, rental unit, etc.

Professional Negligence or Negligence – Companies are not always covered except in cases where there is a history of litigation, for example medical malpractice.

Additional risks covered (generally, companies do not insure against these risks): litigation resulting from libel, mental disorder or distress, emotional harm, defamation.

You should remember that on any claim, the Umbrella insurer will first want you to be paid based on your primary insurance policy; theirs will be activated when you have reached the maximum of your primary insurance. So, in the end, Umbrella insurance is insurance to protect against catastrophic risks that could close your business or cost you huge sums of money in litigation.

In fact, Umbrella insurance is and should be part of your suite of business protection products, just like you have credit card insurance or fraud insurance. Unfortunately, ours is a disputed partnership. There are hundreds of attorneys whose primary competence is to advise victims, real or imagined, to pursue litigation, or at least threaten it, to get the best “deal” they can get.

I do not mean to suggest that litigation for injuries, emotional disturbances, etc. it is always, or even mostly heinous.

So how do you go about determining what you need? Some advices:

• talk to your insurance agent. He is a versatile professional not only in assessing business needs, but also in exchanging experiences.
• Depending on the size of your company and the industry you are in, you will want to be with the largest company rather than the smallest. Larger insurance firms have more resources in case they need to negotiate a settlement, they also have access to excellent attorneys. The extra money you pay for your “brand” is often worth it.
• Talk to your friendly competitor or even key suppliers. They can share their experience with you and give you a good robust market.
• Make sure your primary insurance package is good. Not only should it cover common risks for you, it should also suffice. Don’t underwrite to save a few dollars.

Good luck