How To Calculate How Much Umbrella Insurance Coverage Your Business Needs

As a business owner, protecting your company from potential legal liabilities is important. One way to do this is by purchasing a commercial umbrella insurance policy. But how do you know if you actually need one? Here are some key factors to consider when calculating if a commercial umbrella insurance policy is necessary for your business.

Assess your current insurance coverage:

The first step in determining if you need a commercial umbrella insurance policy is to evaluate your current insurance coverage. Look at the limits on your current liability insurance policies, such as your general liability insurance or your business auto insurance. If the limits on these policies are relatively low, or if you have a higher-risk business, a commercial umbrella insurance policy may be necessary to provide additional protection.

Consider the potential financial impact of a lawsuit:

Imagine your business is sued and found liable for damages. Could your current insurance coverage handle the financial burden of paying for legal fees and damages? If not, a commercial umbrella insurance policy could provide the necessary financial protection.

Take into account your business's risk level:

Certain industries, such as construction or manufacturing, have a higher risk of liability due to the nature of their work. If your business falls into one of these industries, a commercial umbrella insurance policy may be necessary to provide additional protection.

Consider your business's assets:

If your business has a significant amount of assets, such as real estate or expensive equipment, it may be worth investing in a commercial umbrella insurance policy to protect these assets in the event of a lawsuit.

Factor in your business's size:

The larger your business, the more likely it is to be sued. If your business has a significant number of employees or customers, a commercial umbrella insurance policy could provide added protection against potential lawsuits.

These are several factors to consider when determining if a commercial umbrella insurance policy is necessary for your business. By assessing your current insurance coverage, considering the potential financial impact of a lawsuit, evaluating your business's risk level, taking into account your business's assets, and factoring in your business's size, you can make an informed decision about whether or not a commercial umbrella insurance policy is right for you.

USI Insurance Services offers customized umbrella evaluations that crunch existing policyholder data over hundreds of business industries to ensure that your umbrella coverage is in line with industry peers from both a coverage and premium perspective. Feel free to contact me at 516-534-3554 or email at [email protected] to discuss how USI can help you.