Having an insurance policy helps:
Legal fee is no small matter and depending on your business and lawsuit, can even go into millions. If this happens, you will be mighty grateful you don't have to fish out the millions from your own pocket, especially if you don't have them and are required to forfeit your entire property and future inheritance to make ends meet.
Having an insurance coverage is not only a safety net against the unthinkable happening, but also necessary for conducting regular business transactions. For example, if you plan on renting your office premises, you will have to furnish an insurance certificate as a rent-money guarantee. So, if you suffer a setback and your business folds up, the landlord doesn't get to share in your loss and miss out on the rent money.
There is a difference between property insurance coverage and liability insurance coverage. The former is based on the estimated market value of your property. The latter value is hard to pin down. There is no way of knowing beforehand how much costs you are likely to ring up if you get landed with a lawsuit or have an accident. Your general liability policies will not, of course, cover these costs. It is the umbrella insurance that will provide the required extra coverage.
- It kicks off where your other liability policies end and provides you with additional coverage.
- It covers claims that the other liability policies may not cover, like if you get yourself involved in the wrong end of cases to do with libel or slander.
- Professional Liability Policies
- Product Recall Coverage
- Workers' Compensation Insurance
- The Insurance company that is offering the coverage
- The amount of coverage that you are buying
- Your personal reliability. If you're the sort that has a long criminal record and a short credit ranking, you will be saddled with hefty premiums.