Rising Cost of Umbrella Insurance: Why Now Is the Time to Get It

The goal of umbrella insurance is to provide additional liability coverage beyond the limits on your standard business insurance policies. This policy kicks in when other insurance plans fall short of covering the costs and the policyholder is accountable for damage or injuries caused to third-parties. Umbrella insurance safeguards the policyholder against litigation and major claims. Also known as additional liability coverage, it helps the policyholder in protecting their valuable assets.

Who Needs Umbrella Insurance?

While there is no law that requires you to buy umbrella insurance, it is still worth considering if you:

  • Possess large assets or funds
  • Possess items that may result in injuries, such as heavy machinery or complicated equipment
  • Are a celebrity

Umbrella Insurance Vs. Other Types of Insurance

In many cases, your insurance coverage may not cover the costs of a lawsuit, in which case you may be required to pay the fees out of pocket. Lawsuits can involve a sizable financial burden. Commercial umbrella insurance can protect your business against such financial hardship.

While you might consider raising the limits on your other policies, the coverage may not be enough, especially for costs that do not fall under the scope of a typical accident. For instance, a casual comment published on social media could result in a defamation lawsuit. While other standard policies may not cover such claims, an umbrella insurance policy can kick in and pay for the resulting expenses.

What’s Pushing up Umbrella Insurance Costs

  1. Pricing Complexities –  Before deciding on the specifics of a policy, insurers generally look at the claims history. For instance, an auto insurance company will check your driving history, frequency of accidents, and other factors. In a commercial umbrella insurance policy, payouts are often large and a wide range of claims are covered. So, quoting a price can be tricky.
  2. Increase in claims – The insurer typically increases premiums in response to an uptick in claims and the payouts that go along with them. This has been especially true for commercial umbrella insurance in the last few years. For instance, with an increase in the number of vehicles on the road, there has been an upsurge in accidents and consequently in the number of claims. Similarly, with social media being a pervasive element in our daily lives, we now see an uptick in online slander and libel allegations.
  3. Increased propensity to sue- Due to the regular televised promotion of legal defense, an increasing number of people are hiring attorneys for claim settlements.  The idea of getting huge compensation in case the case goes to trial is a common misconception today. Additionally, even without a jury, the price of settlements has risen dramatically. 

Choose Reardon Agency Insurance for All-round Coverage

Any business insurance strategy should include umbrella insurance as a crucial component. With commercial umbrella rates increasing, it is more crucial than ever for a company to get additional protection as soon as possible.

Our expert team is prepared to assist you in finding tailored commercial umbrella insurance in Connecticut that meets the unique demands of your company. Regardless of the size of your business, we can help you stay safe. Contact us at Reardon Agency Insurance today!

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