Insureon Blog

How an Umbrella Can Save a Business: An Insurance Tale

18. June 2013 12:18

Last Thursday night at Shuckers Bar & Grill in North Bay Village, FL, about 100 people stood on the deck, cheering on the Miami Heat during the NBA finals. But, according to CNN, as the Heat scored, the bar goers stood to cheer louder – and the deck collapsed ( The power went out as the police stepped in.

As of this writing, two people are in serious condition, and 31 are injured. Sources are still not sure what caused the collapse.

The good news? If the restaurant has adequate business insurance in place, it should be able to cover any costs it’s found liable for, including injured people’s medical bills and repairs to the collapsed deck. Here’s a look at the type of insurance policies that would be cover Shuckers’ losses.

General Liability Insurance

Since someone might claim that Shuckers was responsible for creating the unsafe environment that allowed the deck to collapse, the business might be met with a lawsuit. In the event of such a suit, General Liability insurance would cover…

Workers’ Compensation Insurance

Shuckers would be held responsible for paying the resulting medical expenses for employees hurt in the collapse, as well as the wages an employee would have earned during their recovery period. Workers’ Compensation Insurance will cover two major sources of liability for Shuckers: first, the costs associated with workplace illness and injury suffered by employees (medical bills, lost wages, and employee replacement).

Second, a subtype of Workers’ Comp called Employer’s Liability Insurance will pay for legal costs in the event that an injured employee decides to sue their employee about the injury, alleging, for example, that the restaurant should have limited the number of people on the deck to prevent the collapse. (Read more about the benefits of Workers' Compensation Insurance.)

Property Insurance

The deck disaster caused not only structural damage to the restaurant building, but also damage to equipment like expensive TVs and outdoor seating. Property Insurance will cover the costs of repairing or replacing Shuckers’ damaged property. The restaurant’s Property policy is likely one of two types:

How Much Insurance Is Enough?

But even if Shuckers had General Liability and Property Insurance, their coverage might not be enough. One-hundred people were involved in the accident, 24 of them with injuries requiring medical attention – that’s a lot of damage. Thankfully, Umbrella Liability Insurance is available and a relatively inexpensive way to provide extra coverage for unexpected events like this.

What is Umbrella Liability Insurance?

Umbrella Liability Insurance, also known as Excess Liability Insurance, is designed to add on to existing insurance policies. It increases the coverage limit on the business insurance you already have, like General Liability, Hired and Non-Owned Auto Liability and Employer’s Liability.

For example, if Shuckers faced a $2 million dollar legal settlement, and their GLI policy limit was only $1 million, the restaurant’s owners would be responsible for coming up with an additional $1 million, either from business revenue or personal assets – or the benefits offered by an Umbrella Insurance policy.

Do I Need Umbrella Liability Insurance?

Umbrella Insurance policies tend to be a relatively inexpensive way to provide extra protection for company finances, and peace of mind for the everyday small-business owner. If you have a business that tries its best to provide for its employees, customers, and its own future, Umbrella Insurance policies can help you better manage your risks for only a couple hundred dollars a year.

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