Florida Umbrella/Excess Liability Business Coverage Agents

Excess liability insurance is perhaps not the most sought after or most necessary form of insurance, but in difficult times it can be a lifesaver. You can think of excess liability insurance as a backup plan or as a supplement to your underlying liability insurance. Some people even like to think of it as insurance for your insurance. It’s like an added layer of insurance to make sure you’re completely covered, even beyond the limits of your original insurance policy.

It’s important to note that excess liability insurance only kicks in once your original insurance policy is maxed out, hence the term “excess.” Let’s say someone gets injured during a visit to your small business and they decide to sue you for 2 million dollars. If the ruling is in their favor then your original insurance policy will kick in, but what if it’s for just 1 million dollars? You would have to pay the other million out of your own pocket, unless you have an excess liability insurance policy for 1 million or more which would then cover the deficit and you wouldn’t have to pay a penny out of pocket.

Just know that excess liability insurance won’t extend your pre-existing coverage. Meaning that if your insurance policy covers you for A and B but not C, then the excess liability insurance you get will also cover you for A and B, but still not C. The coverage for A and B will increase with excess liability insurance, but no coverage will be extended to C.

So what are the aspects of your business for which you can purchase excess liability insurance? Lawsuits and legal expenses are certainly an applicable aspect, like the example mentioned earlier where your business faced a lawsuit. Excess liability insurance will also cover bodily as well as property damages. You can also get it for your commercial auto insurance policy in order to add supplementary coverage to your original policy.

Even though excess liability insurance exists, It is still very important to properly insure your business before adding the excess liability as it will never be your first line of defense. Using the example mentioned above, the first million in damages will always be paid by your original policy and never by the excess liability insurance. Excess liability insurance only works if the damages or costs exceed the limits provided by your underlying policy. If you were sued for $500,000 and your original policy covers up to 1 million dollars then there would be no role for excess liability at all.

Remember that excess liability insurance gives you a higher ceiling but not a broader one. The same items and aspects covered by your primary insurance policy will be the same exact ones covered by excess liability insurance, but with higher limits. There’s no way that excess liability insurance can cover items that aren’t already covered by your original policy.

Hopefully you never have to make a claim against your primary or excess insurance policies, but it should give you piece of mind as a business owner to know that you are properly insured in the event of a loss or lawsuit.  Excess lability insurance is also typically sold at a much lower premium than the primary liability insurance which makes buying the excess insurance policy a lot more attractive to business owners.  If you are interested in getting an insurance review on your current insurance always remember to work with a licensed insurance agent.  Contact us today for a free consultation and insurance audit.