Once a policy’s limit is reached, umbrella insurance (or excess liability insurance) provides additional funds for claims made on general liability, commercial auto, or employer’s liability insurance.
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:
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.
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:
Umbrella insurance also covers claims on the general liability insurance portion of a business owner’s policy.
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:
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.
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:
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.
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.
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.