Do I Need Umbrella Insurance for a Startup Company?

Owning a company is a stressful endeavor. There is plenty that can go wrong at any given time. If you own a business, you certainly don’t need more to stress about. We hate to be the bearers of bad news, but there is one big thing that you may have missed: a tremendous amount of companies are not covered against catastrophic losses or lawsuits that have the potential to close their doors for good.  

The fact of the matter is, that you simply cannot adequately protect your business without commercial umbrella coverage. Umbrella insurance is not a nice-to-have: it is critical that every business has it in place, whether you are a startup company or a business that has been operating for decades. 

What Is Umbrella Insurance?

Umbrella insurance is a type of liability insurance in addition to specified other policies and may also potentially serve as the primary insurance for losses that other policies do not cover. In other words, umbrella insurance both exceeds the scope of coverage and the amount of coverage offered by other insurance policies. 

A Simple Explanation of How Umbrella Insurance Works

Umbrella insurance will extend primary liability policies such as commercial auto insurance and general liability insurance, offering you greater protection for your startup company

Without commercial umbrella insurance, any claim that exceeds the limits of your existing policies will have to be paid for out of your own pocket. This can place massive financial strain on your company, especially if you are only starting out.  

What is Covered by Umbrella Insurance? 

Commercial umbrella insurance covers claims such as: 

  • Property damage to someone else’s belongings that was caused by your company. 
  • Bodily injury to an employee or a customer/client. 

Why You Need Umbrella Insurance

Here are just a few of the many reasons why your startup company might need umbrella insurance: 

  • Without umbrella insurance you risk going bankrupt. This is especially applicable for businesses in litigation-prone industries where one large jury award can put you out of business when it surpasses your policies’ limits. 
  • If an accident occurs, customers want to know that you will be able to cover it.
  • You manufacture hazardous materials and there is a high risk of occupational injuries, making your business inherently dangerous.
  • Your employees drive company vehicles, or their personal vehicles, to do their work.

Commercial umbrella insurance offers companies additional protection against catastrophic events that surpass your insurance limits. This can include employee auto insurance accidents or lawsuits that run into the millions. 

How Much Will Umbrella Insurance Cost? 

Because umbrella insurance is intended to supplement your other policies, it is generally comparably affordable. 

Liability is simply a factor of doing business. And every business that plans on remaining solvent and competitive should have an umbrella policy for proactive peace of mind. 

Rest Easy, Paradiso Insurance Has You Covered

If you are starting a company, make sure that you have the right insurance policies to cover you should the worst happen. Commercial umbrella insurance is an absolutely essential part of protecting your company. 

To learn more about umbrella insurance for your business, read about the commercial umbrella coverage offered by Paradiso Insurance.

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