Look into an Umbrella Policy To Protect Against 'Surprises'
Consider the addition of an umbrella policy to your current insurance coverage. The umbrella insurance policy is liability insurance that will give you additional coverage over and above the insurance you now carry for those terrible situations that can occur and put you out of business. What are we talking about? Let's say you have responsibly purchased the various insurances you should have for your business and feel relatively certain that you have the coverage you need for your growing auto repair enterprise.
Then, one afternoon, your mechanic is out in your tow truck picking up a car that has broken down. The mechanic senses he is behind schedule and is driving too fast. At the same time, he is text messaging a friend. Consequently, he runs a red light, smashes into a car and and severely injures the driver of that car. It is a God-awful, tragic accident but the responsibility is clear: your truck, your employee…YOU!!! Although you have commercial auto insurance, without an umbrella policy over and above it, it could put you out of business, take your house, your savings, everything.
The umbrella plan is for when the unusual, the tragic, the stupid and the expensive happen!
Do not make the mistake of thinking that the umbrella insurance can simply replace the insurance that you have. It will not. It is not designed that way. Typically, the umbrella kicks in after the other coverage has been exhausted. Let's say there is a $3 million judgment against you but the liability portion of your business owners policy (BOP) may have a liability limit of $2 million. Your umbrella policy would then satisfy the other $1 million. Without that umbrella, your insurance would pay $2 million and you would have to come up with the third million...do you have that kind of money handy?
When shopping for such a policy, talk to your insurance agent but also talk to other small businesses that are in the same business that you are in to ensure that you are getting the best deal. This is not the type of insurance that you can buy and forget about, at least not if you want to get the best buy. You need to go into the market every couple of years to see who will give you the best coverage for the best price. If you are working with an independent insurance agent who is on the ball, he or she will be doing this for you.