Umbrella and Excess Liability Insurance Quotes, Policies and Service for Colorado Entity
Does your Colorado or Denver company need an Umbrella insurance policy to meet contractual requirements or provide additional protection for your operations? Our local independent agency has been helping various types of business with umbrella or excess insurance quotes since 2004. Contact us to obtain affordable insurance for your business.
Below is an overview of a business umbrella policy that will help you understand the what and why of excess or umbrella insurance policies.
Why should my organization purchase an Umbrella or Excess policy?
In a culture where litigation is commonplace, Colorado business owners have many more worries than making profits and retaining top employees. If your product injures a consumer, your organization could face a devastating lawsuit, exponential damages and a tainted reputation in the marketplace. To assist with the financial burden of a claim, many business owners purchase commercial umbrella insurance on top of their standard commercial general liability (CGL) insurance policies.
Most general liability policies have an aggregate limit that, once exhausted, will not cover any other excess claims. Experienced business professionals understand that the litigious nature of our society combined with surmounting liability judgments are reason enough to purchase additional coverage. Even if you believe the general liability policy you have in place provides enough coverage you may have a client or business partner that requires an umbrella to meet contract obligations.
Over the years, courts have reached multimillion-dollar verdicts as the result of the following: a grain elevator explosion in which an individual suffered severe burns in Ohio; the use of a chemical inaccurately labeled as animal feed in which thousands of livestock died in Michigan; and a commercial truck accident in Florida in which many people lost their lives.
Businesses are also liable for the health and safety of their employees and for their employees’ behavior. For instance, your business could be held liable after your holiday party results in property damage to a rented banquet hall. You may also face litigation if your business office has a carbon monoxide leak that causes a number of employees to get extremely ill. To protect against an unforeseen claim similar to these, commercial umbrella insurance protection is a must.
Purpose of Umbrella Coverage
Umbrella coverage is designed to protect an organization against monumental liability claims that can demolish a business through a large financial judgment. Typically, an umbrella policy serves the following purposes:
- Provides coverage for potential damages and court defense fees that exceed underlying insurance policies (typically CGL policies).
- Provides coverage in situations that are not covered by underlying insurance policies but are not excluded from the umbrella policy. This benefit is subject to a self-insured retention (SIR), similar to a deductible, in which the policy holder is responsible for losses up to the SIR amount.
- Applies to claims where the aggregate limit of theunderlying policy has been met. The umbrella policy will cover the portion of the claim that cannot be paid with the underlying policy because there are not enough funds available in the policy to cover the entire claim. For instance, if at the time of a claim your CGL policy has $500,000 remaining and the claim in question is $1.5 million, then the CGL policy will cover $500,000 and then the umbrella policy will cover the remaining $1 million.
A typical umbrella policy has the following features:
- Offers coverage for worldwide; personal injury; blanket contractual liability protection; care, custody and control; non-owned aircraft liability; watercraft liability; advertisers liability; liquor law liability; and XCU liability.
- Offers an extension of insurance protection for additional insureds.
- Policies follow form, meaning they abide by similar provisions and cover similar losses as the underlying policy. If claims are not covered by an underlying policy, the umbrella policy makes the business responsible for the loss if it exceeds SIR limits. The damage must also involve personal injury, property damage or advertising injury.
- The insurer has the right to investigate all claims not covered by any underlying insurance.
- Policies either cover all individuals or cover parties that gain insured status within the contract. Policies also protect an organization’s executive officers, regular employees, directors and stockholders acting on behalf of the organization. Protection for additional insureds in typically excluded when claims involve motorized vehicles, watercrafts and aircrafts.
Beyond these stipulations, a commercial umbrella policy ascertains that an organization must hold an underlying insurance policy during the term of the policy. To learn more about averting your business risks with commercial umbrella insurance, contact Orcutt Insurance Group at (303) 233-2828 today.
Thank you for your consideration.
The Orcutt Group Team