Why Do You Carry An Umbrella

Category: Finance, Insurance.

Why do you carry an umbrella?

Well, not exactly. The easy answer is so that you protect yourself from the rain, right? You also carry an umbrella in case it rains, at least forward- looking people do. In other words, an umbrella is an" insurance policy" in the event that weather disaster strikes you. And business owners and professionals looking for the right insurance always have to be forward- looking, don t they? You may have a waterproof coat on.

You might have even picked a route to walk on which provides you the maximum shelter from rainfall. You may be wearing rain boots. But you ll still carry that umbrella around with you because you want to make sure you don t get soaked once the unwanted event occurs, don t you? It s why they ve come up with something actually called umbrella insurance. Well, it s not all that different when it comes to formal insurance polices. Those creative geniuses in the insurance industry have an answer and a name for everything, don t they? So, if you have, professional liability coverage, say of up to$ 1 million, and a claim is made against you for$ 5 million, the umbrella portion of your coverage can kick in and prevent you from paying the full amount.

To put it in the simplest terms, umbrella insurance is extra coverage you get just in case you your basic coverage runs out. Just as a real umbrella can save you from the disaster of your hair getting wet, despite the most waterproof hat on the market, good umbrella coverage will provide you with protection in case your basic coverage gets soaked, too. One is that it can leave significant assets covered for a relatively small price. There are essentially two advantages to obtaining umbrella insurance. The other advantage is that it can simply provide you with more comprehensive coverage- above and beyond individual policies such as professional liability. Professional liability alone may not be enough, since the limit of that policy could only cover a certain amount of your assets.

Individuals or professionals who have considerable assets that could be at risk under the threat of a lawsuit might want to consider an umbrella policy. By investing in an umbrella policy that would increase the amount of your assets covered, the potential savings in the end could far outweigh the additional costs. Umbrella insurance does just that if you have considerable assets that could be at risk. Liability insurance is meant to protect you from the nightmare lawsuit. The other thing to take into consideration is that, not only does an umbrella policy provide you with added insurance, just like a real umbrella, but it also provides you with coverage that brings together various different aspects of your specific insurance policies. There go those insurance experts with their clever titles again.

In other words, this kind of policy puts under one umbrella components that would otherwise be included in separate coverage. So, a good umbrella insurance package can not only end up costing you a bit less to cover more assets, it can save you the time and effort to seek out individual policies to cover various different components of your business. Like all good insurance policies, it leaves you prepared for when that rainy day hits. For example, say, instead of, getting one policy for professional liability, another policy for property coverage, and yet another for worker s compensation, a cleverly constructed umbrella policy can create for you elements of all of them, and leave you, save you money more widely and deeply covered than you otherwise would be. You ll have that umbrella over your head to meet that day when it comes. For a relatively small extra investment, is it really wise to simply write off the concern and pretend that you don t have to worry about it?

Now, before coming to the conclusion that, despite all the warnings and all the concerns, you probably don t need umbrella coverage, think about some of the consequences of not getting it. Here some food for thought. The first is that you re human. No matter how careful or good you are, and no matter how prepared you think you are to avoid mistakes and causing harm to others, there are two things you have to worry about with respect to umbrella insurance and professional liability. You re not superman- or superwoman. You don t know when or how, but being human means that they mistake can occur one way or another. As a business owner or professional, you are going to make mistakes.

And they can certainly happen in the normal conduct of your business. The second thing to worry about if you don t have umbrella insurance or professional liability coverage is human nature, especially in today s environment of the frivolous lawsuit. In fact, all that has to happen is for there to be a perception of a mistake made by someone you do business with, that you can, that causes damages still end up paying for in terms of legal fees and awarded damages. You almost can t imagine the ways in which your business might touch others, and the ways in which someone out there may claim that the harm they suffered was as a result of something you did. With these under your belt, you help protect yourself from the nightmare lawsuit you never dreamed of ever having to fight. You cannot possibly protect yourself from such a scenario without things like professional liability which may include added umbrella insurance.

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