Umbrella insurance is something that everyone should purchase. Accidents happen in life and the only way to handle it is to be prepared beforehand. This type of insurance will keep you covered in a variety of situations where you would otherwise be liable to pay out of pocket. However, there are two different types of umbrella insurance: commercial and personal. Which should you buy? Which one is right for you? Here are the answers to your questions.
What is commercial umbrella insurance?
Most businesses already have policies that protect their businesses against a lawsuit, but what happens if the cost goes above what you're covered for? Your business may be sued to cover the excess liability. Commercial umbrella coverage gives you extra liability insurance to avoid being sued. This will protect you against major lawsuits and protect your assets in the process.
How is it different from personal umbrella insurance?
Personal umbrella coverage is available to protect your personal assets. This includes your primary residence, cars, motorcycles, seasonal or secondary homes, most watercrafts, recreational vehicles, and rental dwellings. You'll notice that this doesn't include your business. So, if a customer falls and trips in your business, you'll be open for a lawsuit.
Commercial umbrella insurance covers your business specifically and your business assets. This is different from your personal assets. A policy of this nature will cover any general commercial liability that includes bodily injury, property damage, defense costs, and attorney's fees. It will also provide business owners liability and provide insurance to your employees. A personal policy only covers you and those who reside in the home.
Which should I get?
This is an easy question to answer. You should get commercial insurance if you own a business. This includes retail stores, salons, artesian contractors, offices, restaurants, motels, service stations, religious institutes, and much more. If you have an employee, then you should get a commercial umbrella policy.
If you are only looking to cover your home and those who reside in it, then purchase a personal umbrella policy. Having a personal policy will cover you if someone gets hurt inside of your home. If you have people who come to work on your home, you might consider getting this sort of insurance. This can be a cleaning service to a lawn care.
How much does it cover?
This is the last main difference for personal and commercial umbrella insurance is how much is covered. Most of the time, personal policies will cover a person up to $1 or $2 million. This is a substantial amount, which is great for personal property. There is an option to purchase more, but this is the average coverage. It's a significant amount, but not nearly enough if you own a business.
If you own a business, you'll want all of your assets covered. Chances are, you'll have a much higher net worth if you own a business. Your net worth is calculated by adding all of your assets and properties, followed by subtracting your liabilities and debt. If this number exceeds the amount of coverage you have, then you're under-protected. Business umbrella policies can cover up to $15 million where as personal may only cover up to $5 or $10 million. If there are more people in your business, you'll want the higher coverage to avoid a lawsuit due to debt.
