Umbrella Insurance isn’t important for small businesses | Insurance Myths

Consider this scenario: a small contracting business installs a railing at a commercial property. Months later, the railing fails, causing a serious injury. The injured party sues for medical expenses, lost wages, and pain and suffering—totaling well beyond the limits of the contractor’s general liability policy. Without umbrella coverage, the business could be forced to pay the difference out of pocket, putting its assets and future operations at risk.

If your general liability, commercial auto, or property insurance limits are exhausted, your business is responsible for the rest. Umbrella insurance steps in to help cover those excess costs—safeguarding your finances and ensuring your business can withstand the unexpected.

What Commercial Umbrella Insurance Covers

Commercial umbrella insurance provides additional liability coverage that kicks in when your underlying policies reach their limits. It can help cover:

• Legal defense costs
• Medical expenses from third-party injuries
• Judgments and settlements from lawsuits

For instance, if your general liability policy covers up to $1 million but you’re sued for $2 million, umbrella insurance could cover the extra $1 million—helping preserve your business’s assets and future.

💵Cost-Effective Protection for Businesses

For small businesses, every dollar counts—so it’s important to make smart decisions about risk management. Umbrella insurance offers a high level of protection at a relatively low cost, making it one of the most cost-effective ways to extend your liability coverage. By adding $1 million or more in additional coverage on top of your existing policies, it can help prevent one unexpected lawsuit or costly claim from threatening the financial stability of your business. It’s a small investment that can make a big difference when the stakes are high.

While every business has unique risks, many small businesses face more liability exposure than they realize. Umbrella insurance is a smart option for a wide range of industries—not just those with large operations or high-profile risks. You should consider umbrella coverage if your business:

• Has physical premises where clients, customers, or vendors visit
• Operates company vehicles or requires employee driving
• Handles third-party property as part of your services
• Owns valuable assets or equipment that could be at risk in a lawsuit
• Employs staff who interact with the public or perform off-site work
• Provides professional services where errors could lead to legal action
• Hosts events or participates in trade shows and public activities
• Works under contracts that require higher liability limits

From retail shops and contractors to consultants, event planners, and cleaning services—many small businesses could be exposed to risks that exceed the limits of standard policies. Umbrella insurance offers a financial backstop that helps ensure one claim doesn’t become a catastrophic loss.

Don’t Let a Lawsuit Put Your Business at Risk

Running a small business comes with enough challenges—don’t let one unexpected lawsuit threaten everything you’ve built. Commercial umbrella insurance provides a vital safety net. Contact us to find out more about adding an additional layer of coverage to your protection plan.