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Running an LLC can help separate your personal and business finances, but it doesn’t eliminate all the risks your business may face. Depending on your industry, assets, and potential liability exposures, your existing business insurance may not provide all the protection you need. Umbrella insurance can add an extra layer of liability coverage when a claim exceeds the limits of an underlying policy.
What Is Umbrella Insurance?
Umbrella insurance provides additional liability coverage above the limits of certain underlying insurance policies. For an LLC, this extra coverage can help protect the business if it faces a significant liability claim that exceeds the limits of its general liability policy or other qualifying coverage.
Umbrella coverage typically doesn’t replace your underlying business insurance. Instead, it provides additional protection once the limits of an underlying policy have been exhausted, subject to the umbrella policy’s own terms and exclusions.
When Might an LLC Need Umbrella Insurance?
Umbrella insurance may be worth considering if your LLC has substantial assets to protect or faces a higher risk of costly liability claims. Businesses that regularly interact with customers, work on clients’ property, operate vehicles, employ workers, or perform work that could result in significant property damage or bodily injury often carry greater exposure.
Your industry and business size matter too. An LLC with multiple employees, significant equipment, or valuable commercial property may have very different insurance needs compared to a small business run by a single person.
If you’re interested in learning more about umbrella insurance, the team at Christian Insurance Agency, serving Magnolia, TX, is here to help. Reach out to us today to learn more and schedule an appointment with one of our agents.