While most businesses strictly adhere to laws and bylaws in their operations, sometimes a company can make a mistake. Other firms can find themselves on the receiving end of harsh economic conditions or structural changes that threaten their stability. In these instances, regular insurance won’t cut it; these situations will quickly push past your insurance limits. In these circumstances, you need umbrella insurance. Here’s what it is and why you need it.
What is Umbrella Insurance?
As hinted at above, umbrella insurance can help out companies that are on very financially shaky foundations. Essentially, umbrella insurance is a broad kind of coverage (hence the ‘umbrella’) that protects a business from liabilities that threaten its financial stability. It can also be used to fill in gaps that aren’t covered by your other insurance arrangements.
Umbrella insurance protects against an assortment of business-ending events. Consider a lawsuit brought against your business by a family who lost a relative to unsafe working conditions. If the family proves that you were negligent in addressing hazardous working conditions, the compensation amount could easily overpower your insurance limits and reserves. In this situation, umbrella insurance could help keep your business stay afloat.
Why Does Your Business Need Umbrella Insurance?
While the above situation is possible, it isn’t probable that a single personal injury claim won’t bankrupt your business. But the probability depends on your industry:
- Litigation-Prone: These are industries that, by their nature, are predisposed to finding themselves in some legal quagmire. The healthcare and construction industries are examples. Medical malpractice is a common negligent tort and, consequently, grounds for personal injury lawsuits. Construction industries are typically the object of contract breaches, such as not meeting deadlines, etc.
- Danger: These are industries whose services or production processes are often unsafe. The extraction and transport industries are examples. Extraction industries include mining, which involves exposure to harmful materials, like asbestos. The transport industry (drivers, sales, and trucking) had the most fatalities of any occupation in the US in 2018.
- Physical Presence: Any industry with on-site work bears the risk of worker injury or death due to unsafe working conditions. Wrongful death claims can easily cripple a business’s financial situation.
To avoid these business calamities, contact us at the Gilmartin Insurance Agency for umbrella insurance in Jim Thorpe, Scranton, and other places in Pennsylvania. We also offer auto, house, and car insurance and operate in Lehighton, Clarks Summit, Dunmore, and Pittston, PA. Get in touch to defend your business against potentially fatal contingencies.