Protecting your business with the right insurance coverage is crucial, and commercial excess liability insurance can play a vital role in ensuring comprehensive protection. While a commercial general liability policy provides a solid foundation, it may have limitations when it comes to handling high-cost claims – this is where commercial excess liability insurance comes in. Let’s discuss what commercial excess liability insurance is and determine how it could help protect your business.

What is Commercial Excess Liability Insurance?

Commercial excess liability insurance, otherwise known as excess liability coverage or commercial excess liability insurance, is a type of insurance that extends the limits of an existing commercial general liability insurance policy. This means that the terms of the original plan don’t change, but rather this insurance provides a higher dollar limit to safeguard your business in case a claim exceeds the amount of your existing policy.

The most significant advantage of a commercial excess liability policy is the increased coverage limits it offers. By adding an excess liability policy to your existing insurance, you significantly enhance your protection against high-cost claims, which could provide a financial cushion for your business. For instance, if you have a general liability policy with a $1 million limit and add an excess liability policy with a $2 million limit, your total coverage limit would be $3 million.

This kind of additional coverage can be essential to ensuring your business can weather a potentially disastrous payout that may otherwise overwhelm your business’s available funds. Maintaining commercial excess insurance is an investment in the long-term health of your business by establishing a financial safety net for a worst-case scenario.

What does excess liability insurance cover?

As mentioned above, commercial excess liability insurance acts as an extension of an existing commercial liability plan, so the terms of coverage remain the same as the original plan’s terms. That being said, this type of insurance is most often utilized for the following types of policies:

General liability insurance – This type of insurance covers bodily and personal injury, property damage, and any associated legal costs that might result from these claims.

Commercial auto insurance – This insurance covers any injuries that might occur from driving a vehicle for company purposes.
Employer’s liability insurance – This insurance covers employer injury or illnesses that aren’t a part of workers’ compensation.

Does my business need excess liability coverage?

While all businesses should have some form of commercial insurance for worst-case scenarios, whether your business needs excess liability insurance depends on these questions:

Does your business participate in high-risk activities, like construction?

Are you confident your liquid assets will be sufficient to cover your company in case of large payouts?

As with all forms of insurance, excess liability coverage is an investment in protecting your business from the unknown. If there’s a possibility that your existing commercial liability insurance will be insufficient to cover your business, then you should consider purchasing excess liability insurance.

Conclusion

Investing in the long-term health of your business is money well spent for a business that intends on thriving well into the future, and PKIG is ready to help you find the best possible price on your excess liability coverage. With our extensive network of providers, you can compare a variety of plans to find the best coverage for your business without being stuck with any single company’s pricing and coverage options.

Contact PKIG today to partner with a reliable insurance provider that understands the unique challenges your business may face. With PKIG, you can rest assured knowing that your insurance coverage remains optimal and that your business is well-protected against potential risks and claims.

As a small business owner, you have a lot on your plate. From accounting, to marketing and sales, to product development and inventory — the to-do list can seem never ending. That’s why it’s no surprise that details like liability insurance can so easily slip through the cracks, leaving your business financially vulnerable.

Unfortunately, nearly anyone your business interacts with can make claims against you. And without the right insurance protection, these claims could cripple your operation.

What General Liability Insurance Covers

General liability (GL) coverage can be part of a standalone policy or can be part of a business owner’s policy (BOP). This coverage safeguards your business’ finances and reputation in the event a customer or third party takes legal action against you or your employees.

The following are types of claims covered by a GL policy:

Bodily injury: If a third party is injured at your place of business (or as a result of work performed away from your business), your GL policy would cover costs, including medical expenses, lost wages, and any court-awarded compensation or out-of-court settlements.

Property: If your business’s actions result in damage to someone else’s property, your GL policy will cover costs to repair the damage. This applies to real estate, equipment, and supplies, as well as compensation for loss of use during the time it takes for the damaged property to be repaired or replaced.

Personal and advertising injury: If your business causes nonphysical damage to a third party through advertising tactics or other activities, your GL policy will cover these damages. However, coverage does not apply if your business intentionally makes a false statement knowing it will cause harm.

Additionally, if a lawsuit is filed against your business for a covered loss, your GL policy will also cover the legal costs to defend you in addition to your policy limits, including attorney fees and court costs.

GL coverage safeguards your business’s finances and reputation in the event a customer or third party takes legal action against you or your employees.

What General Liability Insurance Doesn’t Cover

GL coverage does have limits — both in dollar amounts and types of situations covered. This depends on a number of factors, including your specific industry and your business’s exposure to visitors and clients.

However, there are a few limits that apply to businesses across the board. GL does not cover the following types of damages:

Workplace injuries: GL normally doesn’t cover workplace injuries to employees. Instead, you’ll need workers compensation coverage, which is legally required by most states.

Damage to your own property: GL covers damages to other parties’ property, but it doesn’t cover your business’s property. Instead, you’ll need a business owner’s, inland marine, or commercial property policy.
Intentional damage: Damage done purposefully or maliciously is not covered under a GL policy.

Damage to client property in your care: GL does not cover damage to a customer’s property while it is in your care. Inland marine and other property coverages can provide this type of protection.

Professional mistakes: Mistakes resulting in a loss aren’t covered by GL. For instance, if your business misprints 10,000 books, general liability coverage won’t reimburse you for the cost of reprints. However, many insurers offer separate policies for businesses that require professional liability protection.

Damage to vehicles: This protection requires a commercial auto policy.

While general liability insurance won’t cover every incident and expense your business might face, it can protect your business from claims brought against you by third parties — and it’s a relatively inexpensive way to create peace of mind.