One of the questions we often receive is whether or not a restoration contractor should purchase an umbrella policy for additional limits of insurance. Depending upon the size of your restoration company, the standard $1,000,000 per occurrence and $2,000,000 aggregate limits may be adequate; however, there are also situations where your company should really consider adding an umbrella insurance policy.
Here are 3 times when your restoration company should consider purchasing an umbrella policy:
1. Your Company Has Multiple Vehicles. When your company has multiple vehicles on the road it is much more likely to be involved in an accident. Many of the claims we have seen that have gone over $1,000,000 have been auto-related claims. (We’ve seen some auto claims go over $5,000,000!) And while you may have great safety procedures for your drivers to follow, you simply can’t be out there with them all the time to ensure they’re driving safely.
2. Your Work Involves High-Value Items or Buildings. If you are working on or around high value buildings or items, you may also want to consider an umbrella policy. Even small damages to high value buildings can quickly force the claim to go over $1,000,000.
3. Type of Work. If your restoration company consistently works on high-risk projects then you should also consider purchasing an umbrella policy. For example, mold work can lead to significant litigation and high-dollar claim amounts. (It’s worth noting that in this instance you would need to make sure your umbrella policy went over your pollution policy.)
The above-mentioned scenarios aren’t the only times your restoration company should consider purchasing an umbrella policy. Depending your average contract size, number of employees, and revenue you may also need to additional limits through an umbrella policy.
Working with an agent that understands your business will help you determine whether or not you need to purchase an umbrella policy and what types of limits would be adequate to protect your company.