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IPS / Lighthouse Insurance Group Blog: umbrella insurance

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Businessman pointing at stylized words - Risk ManagementAll businesses pose liability risks to other parties. All liability risks could potentially devastate your business. However, the most-significant of these are the most likely to lead to trouble. So, standard liability insurance might not prove effective in the most serious cases. It is these cases that might merit the use of a commercial umbrella insurance policy? How can it help you?

Umbrella Coverage

Most businesses carry general liability insurance policies. They might carry other specialized coverage, too. So, if the business causes harm to a third party, liability insurance might be able to help the business compensate those affected. It might cover various costs the person might claim as well as the business’s legal fees in case of lawsuits.

Yet, nearly all liability policies will have policy limits and exclusions present. They will only pay a maximum dollar amount for claims; many will not cover certain claims at all. If you don’t have coverage, you might therefore have to pay a client’s liability claim out of your own pockets. That is bad news for any business.

It is umbrella insurance that might be able to help you out. This coverage acts like an umbrella, or extra protection, for the costs that a standard policy won’t cover. So, if someone files a claim above a policy's limits, this coverage might pay the difference. If your liability policy doesn’t cover a claim, umbrella coverage might.

Extra Covered Costs

Perhaps your general liability insurance contains a $500,000 policy limit. Yet, a customer who falls in your store could sue you for $750,000 in medical bills, lost income and other damages. Your liability insurance might pay only the first $500,000 of that claim. However, your umbrella coverage might be able to step in to cover some or all of the remaining $250,000.

The umbrella policy will have its own limits. However, these usually start with extremely high values. Please note, though, sometimes you must carry the highest available limits on your standard liability policies to qualify for umbrella coverage.

Additional Covered Liabilities

Sometimes, your standard liability policies will not cover certain types of damage. Umbrella policies might. Whether this is true will depend on the type of incident. Policies usually will not cover illegal or intentionally harmful acts committed against others.

Please note, you cannot simply apply all liability costs to your umbrella policy if you don’t have a policy to cover them. What we mean is, if you have a data breach in the business, you might need help from cyber liability insurance. You'll use it before turning to umbrella coverage. You might not be able to make an umbrella claim for the losses unless you have cyber liability coverage to start. Yet, umbrella coverage might apply if a claim exceeds the cyber liability limits.

If you ever have questions, contact Insurance Planning Service. We can help you determine the right course of action.

Also Read: Five Losses Covered by Commercial Umbrella Insurance

When you have liability insurance, you expect it to protect you from the harm you cause others. However, liability policies can only go so far. At times, this means they won’t cover all your losses. You’ll still want protection, nonetheless. This might mean investing in commercial umbrella insurance. What areumbrella closing the gap these policies? What will they cover?

Commercial umbrella insurance is critical in cases resulting in high liability losses. So, carefully consider how your coverage can help your business.

How Umbrella Policies Work

All basic commercial liability policies have financial limits. Thus, if you face a financial claim above these limits, you’ll might have to pay out of pocket for the excesses. With umbrella coverage, however, you’ll get extra funds for hangover losses left by your original policy limits.

Umbrella coverage, because it provides more money, will often prove instrumental to solvency. Coverage can also insure liabilities not covered by your standard insurance policies. Therefore, protection often offers more security in the end.

Umbrella insurance often can apply to a variety of your commercial liability policies. You might be able to claim funding related to losses on your:

1. Bodily injury liability insurance

If someone gets hurt in your business, coverage can help you pay their medical costs. Umbrella insurance can come in handy in case these costs exceed your liability limits.

2. Property damage coverage

If you damage your clients’ property, this coverage can help you repay their losses. Extra umbrella coverage might help if you damage exceptionally-valuable items.

3. Professional errors/malpractice coverage

Professionals like accountants, lawyers or doctors often carry this coverage. It covers the damage you cause your clients, which often prove expensive. Many umbrella policies will often cover extra losses.

4. Commercial auto insurance

If your company vehicles cause an accident, the harm to others could become costly. With umbrella coverage, losses above the cost of your existing commercial auto liability coverage can have coverage.

5. Advertising/personal injuries

You might accidentally commit defamation, libel or slander, either spoken or printed. You’ll often need a specific liability policy in your commercial plan for these risks. In case you have exceptionally costly losses, see if your umbrella coverage will help.

Keep in mind, umbrella insurance is a fluid world. Therefore, policies will vary in what they cover. Some might not include all the coverage listed above.

Therefore, you should take a close look at your commercial liabilities. Ensure any umbrella policy you obtain pertains specifically to your industry and operations. Don’t forget, these policies will have financial limits as well, so ask your agent to increase coverage as necessary.

Also Read: What to Consider When Launching a New Business

image example of personal umbrella insurancePersonal umbrella insurance provides a comprehensive layer of additional protection for those it covers. For many people, this is essential. If you are facing risks related to liability, it is always wise to have some type of coverage to minimize the financial costs related to lawsuits. Today, lawsuits are more common than ever and the amount awarded in such lawsuits, as well as in related settlements, can be financially draining for most people. With the help of personal umbrella insurance, you may reduce some of the costs dramatically.

What Does Personal Umbrella Insurance Cover?

At the heart of these policies is protection from lawsuits and claims made against you. These policies, whether they are for personal or professional use, can help to protect from several key things.

Protecting Against Settlements

If you are being sued for personal injury, a dog bite or another type of negligence, and it is likely that you would be held responsible, your insurance may help cover the settlement. For example, if you have a personal umbrella insurance policy that provides coverage for someone being injured on your property, you may settle the case without having to go to court. Those settlement fees are often covered in this coverage.

Defending Your Rights

Your umbrella insurance also helps cover your legal defense. Whether you are found to be negligent or not, you may have to defend yourself in a court of law. This in itself can be expensive. However, with personal umbrella insurance, your legal defense can be covered in your policy.

Protecting Against Awards

If you do go to court and are found to be negligent, the costs can be very high. These lawsuits may include actual losses, as well as pain and suffering claims. With the help of your umbrella insurance, the costs are generally paid out under this policy, up to the amount of coverage it provides.

In situations where you are facing a lawsuit, which can happen to anyone, having personal umbrella insurance can be very valuable. It’s important not to overlook the value of these policies, the amount of coverage they can offer and just how affordable they are for what they provide.

Get the right coverage today. Call Insurance Planning Service at (800) 220-5582 for more information on Michigan umbrella insurance.

Posted 10:24 PM

Woman under umbrellaIt’s no surprise that a lot of successful business people use a number of resources for advice, particularly when it comes to financial, legal and insurance decisions. When it comes to protecting assets, either as a store owner or real estate investor, the need for the right insurance policies are crucial.

Of course, the main consideration in choosing insurance is the personal liability that comes with, say, owning that rental property. As such, an umbrella insurance policy can help owners if they are the subject of a major claim.

An umbrella insurance policy is like having a mega-liability policy by providing personal and estate protection in areas like:

  • Personal injury: If you’re sued because someone thinks you libeled, defamed or slandered them (to name a few), the policy provides coverage to help defend you in the lawsuit.

  • Loss assessments:  In general, only specific amounts for a claim are covered if you’re sued by a tenant or a visitor to your property. It also provides protection if a corporation or association sues you.
Here’s just one example of coverage for a million-dollar lawsuit because you backed over someone at your place of business or rental property:
  • An auto insurance policy’s bodily injury limit of $300,000 kicks in; still, there’s a $700,000 gap to cover, which is where the umbrella insurance policy comes in.

In short, the umbrella protection adds another level of liability coverage that is above the limits one might already have on their homeowners, auto, business or boat insurance. Furthermore, it just may offer a broader scope of protection from any claims that might be excluded by your primary insurance coverages.

We’ve got you covered. Call Insurance Planning Service at (734) 421-9900 for more information on Michigan umbrella insurance.

Livonia Umbrella PolicyThe premium on my personal umbrella liability insurance policy increased halfway through the policy term. My insurance agent says it’s because I added a teen driver. This doesn’t seem right since our son is a good student and is covered by our auto insurance policy.

Umbrella coverage works hand in hand with your auto and home insurance. For example, if you are in an auto accident and badly injure or kill another, you can easily exhaust the bodily injury limits of your auto insurance policy. When that happens, your umbrella policy steps in and pays the extra expense you owe, up to the umbrella limit, which is usually $1 million.

As a group, teenagers have the greatest accident rate of any drivers, and auto accidents are principal cause of teen deaths. There are many reasons for these data: teens are easily distracted by electronic devices (mp3 players, cell phones, etc.), they are more inexperienced drivers and they usually engage in riskier behaviors. However, there are precautions you can take to keep your son safe behind the wheel. If your state doesn’t restrict cell phone use and texting while driving or impose curfews and passenger limits for young drivers, you can set limits on those activities yourself.

With time and a good driving record, your son’s auto and umbrella insurance premiums will decrease. Meanwhile, you can get a lower overall rate for your family’s insurance by buying your auto, home and umbrella coverage from the same insurance agency. Also ask about good student and other relevant discounts. Increasing your auto and/or home deductibles is another way to make insurance more affordable, but make sure that you can actually afford to pay these deductibles.

To learn more about Livonia umbrella liability insurance contact us at 800-220-5582 or get a free umbrella liability insurance quote.

734.421.9900  |  800.220.5582  |


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Lighthouse Group Main Office in Grand Rapids, MI
Mailing Address | P.O. Box 530009, Livonia, MI 48153

Phone: 734.421.9900 | Toll Free: 800.220.5582 | Fax: 734.421.9911

Also serving these Detroit area communities in Michigan: Livonia, Farmington Hills, Ann Arbor, Southfield, Plymouth, Canton, Westland, Northville, Novi, Dearborn, South Lyon & Walled Lake