Most business owners are aware that the chances of facing a lawsuit are pretty high. A study by Fullbright reports that 90% of American businesses are involved in litigation every year. The average number of lawsuit managed by each company is 37. One useful tool to reduce the risk of serious financial damage is umbrella insurance.
Umbrella insurance does two things. First, it extends the policy limits of other insurance policies that are named in the umbrella policy. Secondly, it may cover some claims that are not covered at all by other policies.
If a claim is made that exceeds the policy limit of some insurance that is covered by an umbrella policy, first the total amount of the policy limit is paid by the underlying policy and then the umbrella insurance kicks in to cover any excessive amount up to the maximum limit of the umbrella insurance.
Umbrella insurance can be customized to cover specific types of legal problems. Some legal risks that may be covered are legal fees for false arrest, and claims of libel or slander. Other things that may be covered are discrimination and sexual harassment in the workplace.
Consult with your insurance agent at Armorcrest Insurance Services, serving the El Centro, CA area and the surrounding communities to discuss the types of coverage that may be available for your specific needs.
It is very common for umbrella insurance policy limits to be in the multiple millions of dollars. The minimum amount of coverage needed is at least a person’s net worth. If their net worth is $10 million, then the umbrella insurance should be at least that amount. The common sense reason for this is for asset protection in the case of a lawsuit.
It may be even better to go higher for the limit because after the full amount of insurance is exhausted, then a business owner may be liable for the difference needed to pay the settlement or judgment claim.
If you already have umbrella insurance or you need a new policy, talk with your agent at Armorcrest Insurance Services in El Centro, CA to make sure you have enough insurance to protect your assets and avoid a terrible financial disaster if some unforeseen thing occurs.