Umbrella & Excess Liability

Let’s face it, as investors we know that attorneys and tenants love to file lawsuits, whether legitimate or not, and it costs a great deal of money to defend yourself.

‘Commercial Umbrella’ insurance, also referred to sometimes as ‘Excess Liability’ insurance, is a separate commercial liability policy which acts like a ‘second layer’ of defense in the event you suffer a liability claim or lawsuit which exceeds the liability limits of your underlying general liability or business owner’s policy.  More often than not, excess liability coverage is written in the ‘surplus lines’ insurance market and few agents truly understand the nuances and complexities of quoting and issuing this type of coverage.

For example, let’s say that you are sued by a tenant who falls and injures himself due to a poorly-maintained railing on the second story walkway of your apartment building.  Your initial general liability policy has a ‘per occurrence’ limit of $1M.  Your legal and defense costs end up at $300,000, which leaves $700,000 in coverage.  However, the jury is sympathetic to the tenant/plaintiff and they award him a settlement amount of $1.5M.  In this case, the $700,000 you have left on your general liability policy would be used towards this settlement amount but the remaining balance of $800,000 is not covered, which means you are personally responsible for paying this amount and suffering the judgment.  This could mean bankruptcy for most investors and property owners.

With a $1M commercial umbrella policy in place, the $700,000 would still be paid by the underlying policy, but once the coverage was exhausted, the umbrella policy would ‘kick in’ and pay the remaining $800,000 balance on your behalf so that you do not lose your assets and investments.

Commercial umbrella policies function similarly to personal umbrella policies, but they are only for commercial risks. Premiums can vary greatly, depending upon the company and nature of the risk, and they all require underlying general liability coverage of at least $1M.

Insurance For Investors has a great deal of experience in litigation, real estate and contract law, and liability protection, and we can, therefore, provide exactly the right coverage that you need for your investments and liability risks.  We shop quotes through our numerous companies and offer you only the best coverage at the best rate.

If you would like for us to look at your commercial property insurance needs, call us at (512) 501-4010 or (800) 299-8994 to see how we can help.  You may also email us at Info@InsuranceForInvestors.com and we will contact you back to discuss your own unique risk and liability situation and tailor a solutions specific to your needs.