- 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 costly for any wholesale business – even to the point where your insurance policy can’t cover everything. Umbrella insurance for wholesalers, also called excess liability insurance, can make up the difference when a claim exceeds the limit of your underlying policy.
This policy supplements the coverage offered by:
- General liability insurance
- Commercial auto insurance
- Employer’s liability insurance
Who needs umbrella / excess liability insurance?
It used to be the case that only large wholesalers carried umbrella insurance. Now, small wholesale businesses are investing in this policy to guard against high-cost lawsuits. It's often less expensive to purchase umbrella insurance than to increase the limits on the underlying policy. Plus, you can add endorsements to umbrella insurance that it may not be possible to add to an underlying policy.
Consider carrying umbrella insurance if you:
- Are concerned about exclusions on other liability policies
- Need more protection and are on a budget
- Interact with the public on a regular basis
When it comes to umbrella insurance, purchasing coverage from the same insurance provider who sold you the other policies is typically easier and more affordable.
How does umbrella insurance work for wholesalers?
When a wholesale business carries umbrella insurance, it increases the protection limits of your existing liability policies. For instance, you might have a general liability insurance policy with a $1 million per-occurrence limit. This means that it can cover up to $1 million in legal expenses on a single claim.
Now, say a client trips over merchandise in your warehouse, breaks an arm, and sues. Between attorney’s fees and damages, you owe $1.4 million. Umbrella insurance can pay for expenses that go over a policy’s limit, in this case paying for the extra $400,000.
What coverage does umbrella insurance provide for wholesalers?
General liability coverage
Umbrella / excess liability insurance becomes active when your general liability insurance maxes out 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
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, an umbrella insurance policy will pay the additional amount. It also extends coverage on hired and non-owned auto insurance for wholesalers who use a personal car for business purposes.
In an accident, it could help pay for:
- 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 employee is injured and files a lawsuit against the employer, employer’s liability insurance helps pay for legal expenses. Umbrella insurance expands that coverage. For example, if a warehouse employee claims that your failure to provide proper lifting equipment led to a back injury, you could be held liable. When the legal costs exceed the employer’s liability portion of your workers’ compensation policy, your umbrella insurance policy would pay for the amount over the limit.
Umbrella insurance cannot cover:
- Professional liability / errors and omissions lawsuits
- Property insurance claims
- Expenses covered by an underlying policy
- Employee discrimination lawsuits
Other important policies for wholesalers to consider
Umbrella insurance increases the protection of your existing liability policies. Wholesale business owners should consider:
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 wholesale businesses that have employees, workers’ comp can cover medical costs for work injuries.
Business owner’s policy: This policy combines general liability insurance and commercial property insurance, usually at a lower rate than if the policies were purchased separately.
Commercial auto insurance: This policy covers vehicles owned by your business. It typically pays for accidents and damages related to theft, weather, and vandalism.
Surety bonds: This bond assures a wholesale business’s clients that its insurance company will reimburse their losses if the business fails to fulfill a contract.
Get free quotes and compare policies with Insureon
Are you ready to boost your coverage against lawsuits 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.