Liability umbrella insurance pays claims in addition to your business owner’s policy coverage. This type of insurance is important because it provides you with additional liability coverage.
As I stated in an earlier post, a company’s basic liability may be for $100,000 but a $1 million liability umbrella would cover the company for claim amounts between $100,001 and $1 million.
Some of the common features of liability umbrella insurance are:
- First Dollar Defense – which means that you will incur no out-of-pocket expenses for legal costs
- Self-Insured Retention – a portion you pay before the liability umbrella kicks in if your underlying (or basic) policy does not protect you
- Coverage for Acquisitions and Newly Created Subsidiaries – generally this type of coverage is good for a certain amount of time, such as 60 or 90 days
- Punitive Damages Coverage –pays for any punitive damages that result from legal action taken against your firm
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