11 everyday business activities that suggest you need an umbrella policy

If you have a small business, then chances are you are protecting it with either a business owner's policy (BOP) or a commercial package policy (CPP), which offers basic coverages and protection from loss and liability. So why should you consider additional excess liability — or an umbrella — policy?

Simply put, an umbrella policy kicks in after your other policies (like commercial auto liability, general liability or other liability coverages) have been exhausted due to an unusually expensive claim. Think of it as an extra layer of protection for the most serious and potentially devastating liability claims your business could face. And the rates for an umbrella policy are very reasonable. Just remember that umbrella is a supplemental policy, not a standalone policy.

Small businesses still have big liability

So if your small business does any of the following, it's a sure sign that you should consider adding umbrella coverage to your standard business owner's policy:

Does your small business:

  1. Have customers or vendors visit your office?
  2. Operate machinery that can cause injury?
  3. Use social media to promote your business or practice?
  4. Contract with outside contractors like cleaning, plowing or landscaping companies?
  5. Deliver products to other business or homes?
  6. Provide company vehicles to employees (or allow use of personal cars for business)?
  7. Advertise your business in newspapers, TV, radio or billboards?
  8. Share office space with other businesses?
  9. Serve food or beverages?
  10. Have packages delivered to your office?
  11. Rent office space to others?

Did you know?

The average product liability award was nearly $6.4 million*. Could your business absorb that expense?

Consult an independent insurance agent to customize a commercial umbrella policy for total business protection.

Chip Hamann picture

About the author
Chip Hamann serves as The Hanover's Small Commercial chief underwriting officer. In this role, he partners with actuarial, product, technology, corporate underwriting and marketing to help small businesses establish their appetite, determine the competitiveness of form and rate, and decide how to present The Hanover offering to Hanover's agents.


*Thomson Reuters

The recommendation(s), advice and contents of this material are provided for informational purposes only and do not purport to address every possible legal obligation, hazard, code violation, loss potential or exception to good practice. The Hanover Insurance Company and its affiliates and subsidiaries ("The Hanover") specifically disclaim any warranty or representation that acceptance of any recommendations or advice contained herein will make any premises, property or operation safe or in compliance with any law or regulation. Under no circumstances should this material or your acceptance of any recommendations or advice contained herein be construed as establishing the existence or availability of any insurance coverage with The Hanover. By providing this information to you, The Hanover does not assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.

LC 2018-045