Umbrella liability insurance for retail businesses

Lawsuits can be outrageously expensive for any retail business – even to the point where they exceed your policy limits. Umbrella insurance, also called 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

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 $1 million per-occurrence limit. That means it can cover up to $1 million in legal expenses on a single claim.

Now, say you’re a florist and a customer slips in a puddle of water, bangs his 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 $1.5 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 $500,000.

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, or other advertising injuries

Umbrella insurance sometimes covers exclusions on a general liability policy, such as liquor liability insurance. It 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 retailers who use a personal vehicle 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

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 convenience 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
• 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. Now, small retail businesses – including vape shops, grocery stores, pet stores, and convenience stores – are investing in this policy to protect against lawsuits.

Consider carrying umbrella insurance if you:

• Interact with the public on a regular basis
• Need more protection and are on a budget
• Are concerned with the exclusions of other liability policies

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. Retail businesses should also consider:

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.

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

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.

Are you ready to safeguard your clothing store, flower shop, or computer and electronics store with umbrella liability insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.