Chapter 2: Building Your Business Protection Blueprint
Part 2: Industry-Specific Insurance Needs for Architects, Engineers, and Design Professionals
Umbrella Insurance: More Coverage, Less Hassle
We've already discussed how clients may contractually require architects, engineers, and design professionals to carry certain types of liability insurance. So what happens if a client wants you to carry more insurance than you already have?
This isn't unheard of, particularly when you are a solo practitioner who works on a variety of projects. Perhaps you are collaborating on a particularly expensive project and the client requires you to carry $1.5 million in General Liability coverage when your existing policy has a limit of $1 million.
The most cost-effective way to secure additional coverage for a GL policy is to purchase an Excess Liability / Umbrella Insurance policy. This policy allows you to make a claim for more coverage when certain underlying policies' limits have been reached.
There are two great things about Umbrella Insurance. It offers…
- A lot of coverage for little investment. Most Umbrella Insurance policies are sold in increments of $1 million dollars. Typically, this extra coverage won't cost you more than a few hundred dollars each year.
- Protection across multiple policies for one annual premium. Though you pay a single annual rate for Umbrella Insurance, you can apply the coverage to both your General Liability and Hired and Non-Owned Auto Insurance policies.
While Umbrella Insurance can offer a lot of protection, it can't be applied to your Professional Liability / Errors & Omissions policy. If you need higher limits for your E & O plan, be sure to talk to your insurance agent.
An Umbrella policy allows you to draw on millions more in coverage when certain underlying policies' limits have been reached.
NEXT: Hired and Non-Owned Auto Insurance: Protection for Architects, Engineers, and Designers on the Move