Commercial umbrella insurance for retail businesses

Lawsuits can be outrageously expensive for any retail business – even to the point where they exceed your policy limits. Commercial umbrella insurance, similar to excess liability insurance, can provide extra funds to make up the difference.

This policy supplements the coverage offered by:

• General liability insurance
• Commercial auto insurance
• Employer’s liability insurance (part of workers' compensation insurance)

When you purchase umbrella insurance, it boosts the protection of your existing liability policies. For example, you may have a general liability insurance policy with a $2 million per-occurrence limit. That means it can cover up to $2 million in legal expenses on a single claim.

Now, say a customer slips in a puddle of water at your shop, bangs their head on a shelf, and gets a concussion. It leads to an expensive legal battle, and between your lawyer’s fees and damages, you now owe $2.1 million. This is where umbrella coverage comes in. It can pay for expenses that exceed your policy's limit, in this case covering the additional $100,000.

Umbrella insurance steps in 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
• Slander, libel, and other advertising injuries

This policy also covers claims on the general liability insurance portion of a business owner’s policy (BOP).

If a liability 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 (HNOA) for retailers who use a personal vehicle for business purposes. It could help cover legal costs related to:

• Injuries you caused to others
• Damage to another person’s vehicle
• Other property damage you caused

If an employee is injured and files a lawsuit against the owner of a retail store, employer’s liability insurance helps pay for legal costs. Umbrella insurance expands that coverage.

For example, if your store is robbed and a cashier is seriously injured, the cashier could blame you for having insufficient security. When the legal costs exceed the employer’s liability portion of your workers’ compensation coverage, your umbrella liability insurance would cover the amount over the limit.

• Professional liability / errors and omissions lawsuits (for this, look to excess liability insurance)
• Property insurance claims
• Expenses covered by an underlying policy
• Employee discrimination lawsuits

It used to be the case that only big companies purchased umbrella insurance or excess liability insurance. Now, small retail businesses are investing in this policy to protect against lawsuits.

Consider carrying umbrella insurance if you:

• Interact with the public on a regular basis
• Need higher limits for several liability policies
• Need more coverage to fulfill a contract

Note that when it comes to umbrella insurance, it's often easier and more affordable to purchase coverage from the same insurance provider that wrote your other policies.

Umbrella insurance increases the protection of your existing liability policies, but it doesn’t cover damage to your business property, theft, and other risks. Also, you need to buy underlying coverage before you can purchase umbrella insurance.

Owners of retail shops should consider buying:

General liability insurance: This policy can pay legal expenses related to customer property damage and injuries, along with advertising injuries such as slander.

Business owner’s policy: A BOP bundles general liability insurance with commercial property insurance, usually at a lower rate than if the policies were purchased separately.

Workers’ compensation insurance: Required in almost every state for retail stores with employees, workers’ comp can cover medical costs for work-related injuries and illnesses.

Cyber liability insurance: This policy is crucial for retailers who handle credit cards or conduct business online. It helps cover the cost of a data breach or cyberattack.

Liquor liability insurance: If your shop sells alcohol, you likely need this policy to comply with your state's dram shop laws and protect against lawsuits.

Commercial auto insurance: State laws usually require this coverage for business-owned vehicles. It helps cover costs if your retail shop's delivery truck or other vehicle gets into an accident.

Are you ready to safeguard your retail shop with commercial umbrella insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.