So you just purchased your commercial policy. Your business operations may have changed regardless if you live in Brea or Orange County CA. You may need more liability coverage.
You can always look at buying an umbrella policy.
Just like on your Auto Insurance Orange County CA, an umbrella policy provides excess liability.
Insurance Policy Basics CA
Umbrella policies are in place to provide coverage on an excess basis.
As an example, your commercial auto insurance Orange CA policy may need additional liability coverage.
This coverage is above underlying insurance or a self insured retention.
- You can look at this in some ways as a big deductible.
- Keep in mind, some umbrella polices have a form that follows.
- So, does this mean to you. Broader coverage, means more protection.
- Excess policies cover any gaps your underlying policy may have.
Purposes of Insurance Policies
Excess polices are here to help fill in any coverage gaps. So, they are perfect for reducing risk and exposure.
If a loss occurs and covered by your primary policy, excess coverage kicks in once all used.
- Excess polices will cover after a loss exceeds an amount which you have agreed to.
- There are no standard umbrella policy forms. Early umbrella policies are broad and contained few exclusions.
- But, after problems started to arise, Carriers started to narrow the coverage.
Insuring Agreements and Exclusions
A specific insuring agreement and exclusion list is in place to narrow down.
Every type of policy has guidelines including your car insurance policy, comprehensive insurance Brea CA and business auto insurance Brea CA.
- If you have ever overlooked your policy pages, you will find both these sections.
- In the section for each, an outline of each description will be provided to you.
- This is important to review, because if an exclusion to your policy exists, it will defined in this area.
Narrowed Policy Coverage
The reason that these polices were narrowed down, was to offer affordable and comprehensive coverage for losses.
Some of theses losses include, catastrophic losses, incidental exposures, and modest insurance gaps.
- However, if you do not have an underlying policy prior to this coverage then no blanket all risk coverage will be applied.
- This is the reason that many underwriters require you to maintain a sufficient range of underlying coverage prior to proving the umbrella coverage.
- This makes sense, because an umbrella policy is excess of coverage and not primary.
Coverage Disclosure Insurance Policy
Excess policy applications will always require you to disclose underlying coverage.
For the most part, the exclusions and limitations of an excess policy often follow the underlying policy.
What this means to you is, fewer exclusions than your primary cover, less restrictive exclusions, and a broader insuring agreement.
Why do you need an Umbrella Policy
For many businesses in California, an umbrella policy would help to protect business assets that could be threatened.
These threats of course always stem from those multi-million dollar liability lawsuits you hear on T.V.
Usually, these forms provide a minimum of one million in coverage, but are frequently written with limits of ten million to fifty million or more.
These types of polices may include a per occurrence and aggregate limit of liability.
Just review this section to ensure you are properly insured.
Coverage Insurance Gaps
Commercial umbrellas also help by filling the two types of insurance gaps.
These gaps created by oversights and those resulting form exposure.
Some of these open risk may be be fully insurable under traditional polices.
If no primary policy exist, then the required self insured retention will be at least ten thousand but the twenty five thousand mark is more common.
Liability Coverage Minimum CA
Underwriters will usually require you to maintain a minimum of the liability coverage for the policy.
A few of these types of coverage available can be listed as, underlying commercial general liability, automobile liability, and statutory employers liability coverage.
Depending upon the risk type, an underwriter may also request that you carry other coverage.
- There are no standard forms.
- Umbrellas do not always provide the broadest coverage than you underlying policy.
- There are some contracts that are written on a straight excess basis as well.
- For the most part however, broader than the primary coverage.
Personal Injury and Bodily Injury
This is because the insuring agreement refers to personal injury rather than the bodily injury.
Unlike your Auto insurance or CGL, these excess polices do not define personal injury to mean injury other than bodily injury.
This means that bodily injury and more is covered on this form.
This expands the coverage to include a wide rant of torts other than negligence.
You can risk such issues as:
- defamation of character,
- invasion of privacy,
- false arrest,
- wrongful detention
- and mental injury.
Examples of Negligence
The department stores have often been sued for false arrest and wrongful detention.
Can you imagine how this could effect your premium for your primary policy.
Another example, is real estate firms having been charged for discrimination.
The employment and credit practices of any business create personal injury exposure.
Many umbrella policies are also written to include advertising liability.
In many areas, a commercial umbrella may be written to provide coverage that is not included in your primary or underlying policy.
This coverage type will apply above the self insured retention.
Excess polices are commonly provided for worldwide coverage for products liability.
Excess Insurance Policies
This is an important coverage for any firm that sells to the internal markets.
Blanket contractual liability cover for both oral and written contracts may also be included.
These policies frequently provide liability coverage uncommon for incidental malpractice, non owned aircraft and non owned watercraft exposures.
Employees Liability Coverage
It is not uncommon for thee policies to provide for employees liability coverage.
The policy would include them by making employees part of the definition of name insured.
The employees could be sued as individuals for acts of omissions related to their employment.
Primary or underlying liability polices usually will exclude damage to property which in your care custody or control
Including renting or occupying would also fall under this label.
Liquor Law Liability
These coverage are available under umbrella policies.
Umbrellas may also be written to provide liquor law liability and many other liability coverage.
As you can see there are many benefits to protecting your business or operations with excess liability.
This reduces risk factors and potential future losses.
If an unexpected lawsuit or employee mishap should occur, you can with the right umbrella coverage program, get the total protection you need.
Protecting your Business
This reduces other potential cost such as finding a great attorney for litigation.
This coverage protects for unexpected future gaps in protection.
- The unfortunate things about this entire scenario is that many businesses do not even know they are under-protected.
- This can be a costly or devastating mistake that can run you right out of business.
- This is why it is important to have a comprehensive review of your current commercial policy.
- Ensure you getting right coverage options, look for any potential gaps and look over carefully the exclusion and insuring agreement clause.
Policy Coverage Overview
This is so important to understand what is being protected on your policy.
After you understand where you currently stand, you can make a sound choice.
You may be adequately covered in your business operation now.
However, if you get an increase in sales and need to hire fast, will your current policy allow for such options.
Or is there a potential for gaps in coverage.
Consult with a Professional
If in doubt, it is always wise to check with a professional adviser to look over your current policy.
Let them know your current operations and your future goals. You want to make sure you both are on the same page from the start.
In addition, you will want to get in the habit of reporting new information that effects your business with your agent.
This helps to avoid future loss or exposure. Keep in mind that his type of review is called a comprehensive policy review.
It is where you take your current policy and shop it against other competitors. This way you are comparing the same coverage options.
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Your agent or commercial broker will usually ask the common questions needed to rate your policy.
Once you get your policy started and you have operation or business changes during your policy period, then you want to report.
Even if you think it’s not important to report new information at the time, it may end up costing you later.
So, like we say, when in doubt, make sure to ask or report.
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If you should need further help, have questions contact us.
Let one of our commercial specialist do a comprehensive review for you.
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