- Commercial umbrella insurance
Once a policy’s limit is reached, commercial umbrella insurance provides additional coverage for liability claims made on general liability, commercial auto, or employer’s liability insurance.
Umbrella insurance offers extra liability coverage
Lawsuits can be extremely expensive for any manufacturing business – even to the point where the costs exceed your policy limits. Umbrella insurance, also called excess liability insurance for manufacturers, provides coverage when the limit is reached on another liability policy. It often costs less to purchase umbrella insurance than it would to purchase higher limits on the underlying policy.
This policy supplements the coverage offered by:
- General liability insurance
- Commercial auto insurance
- Employer’s liability insurance
How does umbrella insurance work for manufacturers?
When you purchase umbrella insurance, it boosts the protection of your existing liability policies. You may have a general liability policy with a $1 million per-occurrence limit, for example, which means that it can pay up to $1 million in legal costs on a single claim.
Now, a customer slips at your manufacturing facility and suffers a head injury. A costly legal battle ensues, and between your attorney’s fees and damages, you now owe $1.3 million. Umbrella insurance can pay for expenses that exceed your policy's limit, which would be $300,000 in this scenario.
What coverage does umbrella insurance provide for manufacturing businesses?
General liability coverage
Umbrella / excess liability insurance comes into play when your general liability insurance reaches its policy limit. It can help with any general liability claim, including:
- Customer slip-and-fall injuries
- Customer property damage
- Advertising injuries, such as slander and libel
- Copyright infringement
Umbrella insurance also covers claims on the general liability insurance portion of a business owner’s policy.
Commercial auto insurance
If a claim on your commercial auto insurance exceeds the policy limit, umbrella insurance will pay the excess amount. It also extends coverage on hired and non-owned auto insurance for manufacturers who use a personal car for business purposes. In an accident, it could help cover:
- Medical bills for injuries you caused to others
- Damage to another person’s vehicle
- Lawsuits related to bodily injury or property damage
Employer’s liability insurance
If an office clerk, production worker, or other manufacturing employee is injured and sues the employer, employer’s liability insurance can cover the resulting legal costs. Umbrella insurance adds an extra layer of protection by boosting that coverage.
For instance, if an employee suffers a back injury, your business could be blamed and taken to court. When the legal expenses exceed the employer’s liability portion of your workers’ comp coverage, your umbrella policy would cover the amount over the limit.
Umbrella insurance does not cover:
- Professional liability lawsuits
- Property insurance claims
- Expenses covered by the underlying policy
- Employee discrimination lawsuits
Who needs umbrella / excess liability insurance?
In the past, only large manufacturing plants carried umbrella insurance. Today, small manufacturing businesses are investing in this policy to safeguard against costly lawsuits.
Consider carrying this policy if you:
- Welcome the public or other visitors into your facility
- Have concerns about exclusions on other liability policies
- Need more protection and are on a budget
When it comes to umbrella insurance, it's usually easier and more affordable to purchase coverage from the same insurance provider that wrote your underlying policies.
Other policies for manufacturers to consider
Umbrella insurance increases the protection of your existing liability policies, but you cannot purchase this coverage until you have an underlying policy. Manufacturing businesses should consider:
General liability insurance: This policy can pay legal expenses related to customer property damage and injuries, along with advertising injuries such as copyright infringement.
Workers’ compensation insurance: Required in almost every state for manufacturing businesses that have employees, workers’ comp can cover medical costs for work injuries.
Business owner’s policy: This policy bundles general liability insurance with commercial property insurance, usually at a lower rate than if the policies were purchased separately.
Get free quotes and compare policies with Insureon
Are you ready to safeguard your manufacturing business with umbrella liability insurance or another policy? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.