Home Quick Business Tips Are HSAs Becoming Mainstream? Avoiding Incorrect Self-Employed Retirement Deductions Proactive Tax Planning Take Credit for Your Business Intelligence on Competitive Intelligence The Added Protection of Umbrella Insurance Policies The Right Way to Set Up Your Home Office Hints and Reminders Keep Fully Covered with a Business Owners Policy Protecting your assets is essential for any business owner. And for many firms, one of the most convenient ways to do so is with a business owners policy, which combines multiple insurance coverages for property and liability into a single comprehensive package. A cost-effective way to get the core insurance coverages you need, a business owners policy has the flexibility to expand as your business grows and your needs change down the road. Take Steps to Keep Your Business More Secure Learn more about protecting your business with insurance from the Business Insight Series, where industry specialists and business owners share their best practices and strategies in a series of short videos.

As far as insurance goes, an Umbrella or Excess Liability policy goes the extra mile. If you’re looking to bolster key policies, an Excess Liability policy can provide you with additional coverage at reasonable rates.

“Excess Liability basically extends the coverage of your ‘underlying’ policies, which include General Liability, Employers Liability, which encompasses Workers’ Comp, and Commercial or Business Auto policies,” says Jim Cochran, CEO of Techinsurance. “Consider the underlying polices of your baseline coverage, with Excess Liability working to offer an added level of protection on top of your baseline.”

Here’s how it works. Let’s say you have a $1 million Business Auto policy with Hired and Non-Owned Auto coverage, which protects you if you have an employee using his or her personal vehicle to run a business-related errand. In addition, you have a $1 million Excess Liability policy. Unfortunately, an employee has an accident on the way to the office supply store, hitting another vehicle. If the injured person has hospital and legal bills totaling $1.5 million, your Business Auto policy covers the first $1 million and the Excess Liability covers the remainder.

“The real value of an Excess Liability is that, with one policy and for a relatively small premium, you can add coverage on top of a number of underlying policies,” Cochran notes. “It won’t cover more specialized policies, such as Professional Liability or Errors and Omissions policies, but it does cover those key areas of common, general liability.”

There are no hard-and-fast rules regarding the pricing of Excess Liability coverage, but it is typically inexpensive, depending on the type of business you own. “An office-based business might pay, for example, between $350 and $500 per year for each $1 million in coverage,” Cochran says. “The fee is subject to your insurance company’s rates and your business. An office will have different liability needs than an auto repair shop.”

When you put it in perspective, an Excess Liability policy is really about peace of mind. “It’s an added measure of security,” observes Cochran. “If some unexpected, catastrophic event takes place, and property damage or bodily injury occurs, you would have enough coverage so that your ongoing business operations wouldn’t be harmed. The premium is generally so low that even if you never use it, you’re not wasting money, as it’s a tax-deductible business expense. It’s coverage worth discussing with your insurance agent.”

Wells Fargo Insurance, Inc. is a licensed agency that represents — and it compensated by — the insurer based on the amount of insurance sold.