If you're a city club owner, the last thing you want is to get sued. Unfortunately, the possibility of being sued is too real for any business owner. According to one study, anywhere between 36% to 53% of small businesses are involved in at least one litigation.
While there are several reasons, they usually end up in court because of a lawsuit by someone injured on their premises or by an employee who claims they were wrongfully terminated. The good news is that umbrella insurance can help protect your club from these risks and many more.
What Is an Umbrella Insurance Policy and How Does it Work?
An umbrella insurance policy is a supplemental policy. It works by providing excess coverage over your primary insurance. For example, if you have a homeowner's policy that provides $500,000 of personal liability coverage and are sued for $1 million in damages, your homeowner's carrier will only cover $500,000 of the claim. With an umbrella policy in place, the additional $500,000 would be paid by the umbrella carrier.
It is important to note that an umbrella insurance policy is not intended to replace your primary insurance policies; it should be used as backup protection when needed. A common misconception about these types of policies is that they provide broad liability coverage for all kinds of claims against an individual or business-that simply isn't true! They are designed to protect assets like property and equipment from certain types of lawsuits with no exclusions related to ownership or usage or what kind of businesses operate at those premises.
Why Have an Umbrella Coverage?
Now that you know about umbrella insurance, it's time to look at why you should have umbrella coverage for your club.
An umbrella policy is an excess liability insurance policy that covers any claims and lawsuits for damages over the limits of your primary policies. It's not uncommon for a club owner or property manager to have several thousand dollars worth of insurance coverage through their property, auto, and liability policies. However, it's important to note that these coverages typically only cover the first $1 million in damages - anything above that has to be paid out-of-pocket by the club owner.
A good rule of thumb is that if you have a large amount invested in your business, you will want an umbrella policy to protect those assets from even higher costs associated with third-party claims against you. For example, if you own a city club with a liquor license that serves alcohol to its members, you could be sued for damages if someone gets injured or killed due to drunk driving after leaving your club. If the individual's family sues you and is awarded a settlement of $2 million, your property and auto insurance policies would only cover the first $1 million, leaving you to come up with the remaining $1 million on your own.
To cover these additional $1 million expenses, you will need to put your assets at risk. These assets can include your home, savings, and even future earnings. An umbrella policy can help you protect these assets by providing coverage beyond the limits of your primary insurance policies.
Covers Property Damage Claims
Insurance can also protect against property damage. In the event of a fire, flood, or other damage, this coverage protects against destroying your club's assets. Suppose you have a golf course in your club. One day, the course catches fire and spreads quickly due to the grass. This type of property damage can have devastating consequences.
Firstly, it can cost a lot of money to repair the damage. Secondly, it can cause your club to close down for an extended period while repairs are being made. This can result in lost revenue and memberships. Thirdly, it can also cause your club's reputation to suffer.
Now, consider that someone gets injured during the fire accident. If you have only property insurance, it will cover the expenses of the property damage, but it won't protect you against the injured person's claim. On the other hand, if you had leveraged golf insurance services that offer umbrella coverage, the expenses for both property and the lawsuit would have been covered easily. Like golf insurance services, you can also have such insurance with other sports.
As the above example shows, many factors are associated with the damages and insurance policies. Hence, a city club owner should always go for umbrella insurance. The umbrella insurance will cover all these factors and protect you and your club from damage.
Covers Future Lawsuits
As the owner of a city club, you are likely to be sued for something. Whether it's a staff member suing you for overtime or a vendor complaining about not being paid in time, lawsuits can be expensive and stressful. Umbrella coverage protects against future lawsuits by providing additional liability insurance coverage on top of your basic policy. By doing so, umbrella coverage offers peace of mind and protection from potential legal troubles that could arise in the future.
This kind of extra coverage might seem unnecessary at first glance, but consider this: the average cost per claim for small businesses is $20K, according to recent data. While you may not think that's much money when running your own business-and it isn't exactly-those costs add up quickly over time. Just one lawsuit could easily wipe out years worth of profit from your company if all goes wrong!
An umbrella policy is one of the most important policies to protect a city club from liability. An umbrella policy extends your other insurance policies, such as property and general liability. We hope you now understand how important it is to protect your city club from liability. If you don't already have one, it's time to research and find a suitable umbrella policy for your club.