Commercial umbrella insurance for manufacturing businesses

Lawsuits can be extremely expensive for any manufacturing business – even to the point where the costs exceed your policy limits. Commercial umbrella insurance provides coverage when the limit is reached on another liability policy.

This policy supplements the coverage offered by:

• General liability insurance
• Commercial auto insurance or hired and non-owned auto insurance (HNOA)
• Employer’s liability insurance (part of workers' compensation insurance)

When you purchase umbrella insurance, it boosts the protection of your existing liability policies. You may have a general liability policy with a $2 million per-occurrence limit, for example, which means that it can pay up to $2 million in legal costs on a single claim.

Now, a customer slips at your manufacturing facility and suffers a head injury. A costly legal battle ensues, and between your attorney’s fees and damages, you now owe $2.3 million. Umbrella insurance can pay for expenses that exceed your policy's limit, which would be $300,000 in this scenario.

Commercial umbrella insurance (and similarly, excess liability insurance) comes into play when your general liability insurance reaches its policy limit. It can help with any general liability insurance claim, including:

• Customer slip-and-fall injuries
• Customer property damage
• Advertising injuries, such as slander and libel
• Copyright infringement

Umbrella insurance also covers claims on the general liability insurance portion of a business owner’s policy.

If a claim on your commercial auto insurance exceeds the policy limit, umbrella insurance will pay the excess amount. It also extends coverage on hired and non-owned auto insurance for manufacturers who use a personal car for business purposes. In an accident, it could help cover your legal bills for:

• Injuries caused to others
• Damage to another person’s vehicle
• Other property damage caused by your vehicle

If an office clerk, production worker, or other manufacturing employee is injured and sues the employer, employer’s liability insurance can cover the resulting legal costs. Umbrella insurance adds an extra layer of protection by boosting that coverage.

For instance, if an employee suffers a back injury, your business could be blamed and taken to court. When the legal expenses exceed the employer’s liability portion of your workers’ comp coverage, your umbrella policy would cover the amount over the limit.

• Property insurance claims
• Expenses covered by the underlying policy
• Employee discrimination lawsuits

Small manufacturing businesses often invest in this policy to meet outside demands for higher liability limits.

Consider carrying this policy if you welcome the public or other visitors into your facility, or need more protection to comply with a client contract.

When it comes to umbrella insurance, it's usually easier and more affordable to purchase coverage from the same insurance provider that wrote your underlying policies.

Umbrella insurance increases the protection of your existing liability policies, but you cannot purchase this coverage until you have an underlying policy. Manufacturing businesses should consider:

General liability insurance: This is often the first policy purchased by small business owners. It covers legal expenses related to customer property damage and injuries, and usually includes product liability insurance to cover harm caused by your products.

Business owner’s policy (BOP): This policy bundles general liability coverage with commercial property insurance, usually at a lower rate than if the policies were purchased separately.

Workers' compensation insurance: Workers' comp pays for medical bills and provides disability benefits to employees who are injured on the job. Most states require this coverage for businesses that have employees.

Cyber liability insurance: Any business that handles credit card numbers or other personal information should carry cyber insurance. It helps businesses recover from costly cyberattacks and data breaches.

Commercial auto insurance: This policy pays for injuries and property damage caused by your manufacturing business's vehicle. It's required in most states for vehicles owned by a business.

Are you ready to safeguard your manufacturing business with umbrella insurance or another policy? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.