Hello and welcome back to another edition of insurance answers, I'm Billy Bray. We are going to be talking about what umbrella liability coverage is. Most people have insurance policies that have a set limit of coverage. Sometimes it's $500K, sometimes it's $1M and in some cases it's even $2M. But you never have one policy that takes you to $5M or even $10M (with the exception of you having a very captive or a very sophisticated program.) What we recommend is to buy a liability umbrella that umbrellas over the top of your general liability, workers compensation, other liability policies, ect... You can buy an umbrella for $1M or even $2M or really any increment that you want. We've got some clients that have as much as $35M. I believe that we even have someone that has a $50M liability tower. With that said you can get as much as you want in many cases. If you're a company that has a high risk of your workers getting injured on the job. it can get very expensive and very hard to procure, however it's doable in most cases. As the “umbrella tower” gets higher and there's more insurance, each layer gets less expensive because it's less likely to be claimed. When this happens the underwriters give a little bit of a credit, if you're thinking “man I've got a million dollars if I need $10M it's going to be ten times the cost,” that’s not really the case because it's on a sliding scale. Which means that it may be only twice as much or three times as much. But what’s important to know is that it won't be linear math where it's going to be ten times as much. Don't be afraid to explore for it, you don't have to buy it but it is recommended and it can come in very handy for a company that is in commercial auto. It's very smart to have and it's good for your workers compensation to go over it in the case that there's a really bad claim. Workers compensation a lot of the time stops at $1M and sometimes people only have $100K or even $500K. I can’t stress enough that you should look into that. All of these questions are good questions to ask your broker, if you need help understanding or would like assistance click the link below and we'll be happy to assist as well.
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