No one wants to think about what would happen if one of their tow trucks was in an accident, but humor us for a second. Imagine one of your tow trucks was in a wreck and your driver was found to be at fault. The court might demand that you pay the injured party from the accident $4 million in damages. Yikes. Fortunately, you have auto liability insurance…but the limit on that policy is $1 million. Uh oh. Where’s the other $3 million going to come from? That’s where umbrella insurance comes into play.
What is umbrella insurance?
Umbrella insurance is a type of coverage that basically sits on top of your other policies. It provides extra protection for claims like the one above. So, if you have damages and court fees that go above the limit on your other policies, the umbrella insurance will kick in when your other policy taps out.
Umbrella may also cover claims in areas that aren’t covered by the underlying policy, but it may only do that after you pay the Self-Insured Retention rate, or SIR. The SIR is basically like a deductible, or the amount that you agree to pay before your insurance will kick in. Now, the SIR will vary by state and scenario.
Anyways, read your policy carefully to find out how your particular policy works. It’s always important to take the time to go through your policy and ask any questions you have about your coverage.
Why does my towing company need umbrella insurance?
Umbrella insurance is really important for small business because it provides lots of extra coverage for a low cost. It can protect your business from limits on your insurance and holes or gaps in your coverages. It also provides protection against lawsuits – ah, lawsuits.
Don’t underestimate how expensive a claim or a lawsuit can be. The expenses that build up can be high enough to ruin a small business. Imagine if, like in the scenario above, one of your drivers gets into an accident and injures another driver. Your umbrella policy can help you by kicking in when your underlying insurance policy taps out. That way you’d have coverage that goes above and beyond what’s offered by your underlying insurance policy.
How much does umbrella insurance cost?
Well, that depends on how many assets your business has. Different tow truck businesses will need different amounts of umbrella coverage. However, most small businesses find it to be affordable when considering the amount of additional coverage it provides. To get an accurate quote, you can fill out our form and get one for free. We’d be happy to help you explore getting umbrella insurance for your tow truck business.
We don’t have to tell you that the towing industry is high-risk. To protect your business, which you’ve worked hard to build, you might want to consider the extra protection that umbrella insurance will give you. For more information about umbrella coverage or to get a quote, give us a call today or fill out our form.