The limit of your business liability coverage might get exhausted due to high-priced lawsuits or unexpected catastrophes like cybercrime. Once that happens, you can no longer make further claims on your liability insurance. This is when a commercial umbrella policy comes in handy. It is designed to provide coverage over and above your liability insurance.
The insurance protects against a variety of risks, including bodily injury or property damage to third parties, employees injured due to your negligence and cost of legal issues like defence and settlements. In short, an umbrella policy fills the void left by your primary policy. Read on to understand the benefits of an umbrella policy in detail for an informed choice.
Advantages of an Umbrella Policy in India
Umbrella business insurance ensures that you are not left exposed to financial risks when your liability coverage is over. Below are the other top reasons why business owners should consider an umbrella cover.
It offers enhanced protection to business owners against defamation, liability security of your business facility, or false arrests that are not included in your general commercial insurance policy. It also protects from lawsuits, damage caused to property, and libel (harmful written statements).
The premiums are affordable, and the policies offer significant coverage.
Customisable rider options help you tailor the perfect plan to your current business circumstances.
Bundling is allowed in an umbrella policy, which means you can buy this cover at a low rate from the same provider from whom you have taken liability insurance.
With umbrella business insurance, you can enjoy peace of mind that you have an extra layer of security against unforeseen circumstances. Your business will not need to bear the financial burden since the insurer will settle the bills.
How Does a Commercial Umbrella Policy Work?
The coverage amount of the umbrella policy depends on the asset value and potential liability risks. You cannot buy a stand-alone umbrella policy. This is because they are typically meant to supplement an underlying policy. So, make sure you have a base liability insurance policy before you opt for umbrella coverage.
Exclusions of an Umbrella Policy
Although an umbrella policy offers extensive coverage, there are a few things that it does not cover, such as:
Self-inflicted intentional harm, injury, and illegal activities.
Liabilities that arise out of war, terrorism, or riots.
Umbrella coverage is basically “liability” protection. So, it will not cover anything that you or your employees have done on purpose. This includes events like financial fraud or cyberattacks by an insider.
How Do You Claim an Umbrella Policy in India?
Filing a claim is simple. Follow the steps below:
Step 1: Report the incident to your insurer as soon as possible with information regarding the time, place, and other relevant details
Step 2: Provide all essential documents, such as an FIR, as requested by your insurer
The insurer will investigate the case, and the claim will be settled if the proofs are found to be genuine and satisfactory. Compensation will be paid as per the policy terms.
Commercial umbrella policy can cover incidents internationally as well for situations where you might be a business trip and held liable. Read the terms and conditions of the policy carefully to fully understand the inclusions and exclusions before making a final purchase.
