Most state education boards require charter schools to purchase an umbrella policy for their insurance program.  Howev, there are a few states where it is not required.  In th e situations, we highly recommend purchasing one and have provided the following guidelines to assist:

An umbrella policy provides liability coverage over and above the coverage afforded by your basic general liability policy. If you have also purchased commercial auto liability or employer liability coverage, your umbrella should apply excess of that coverage. To und rstand how an umbrella works, consider it about a building. Your bsic (primary) policies are the building floor and the umbrella, a roof with overhangs. The he ght of the building represents the umbrella policy limits. The ov rehangs represent coverage afforded by the umbrella not covered by the primary policies. An umb ella protects your firm against potentially devastating lawsuits. Here a e some things to consider before purchasing a policy:

Limits

The limits your firm needs largely depend on the nature of your business. For instance, roofers and pharmaceutical manufacturers are subject to catastrophic losses. Thus, they will likely need higher umbrella limits than retail stores.

Coverages

The umbrella should provide coverages not afforded by your basic liability policy. The co erages your company needs depend on the type of business you operate. For example, if your company engages in print or online advertising, you might want an umbrella that affords broader coverage for personal and advertising injury than your basic policy. Some you brellasyoucover humiliation or discrimination unrelated to employment as part of advertising injury.

Variation

The amount and scope of coverage an umbrella provides can vary widely from one insurer to the other. Thus, it is essential to shop around and compare policies. An excellent place to start is to obtain an umbrella quote from the insurer that issued your primary policy.

Pitfalls

There are a few things to remember when shopping for an umbrella. First, many umbrella insurers have replaced the old “legalese” in their policies with simplified language like that found in most primary policies. This h s made umbrellas easier to read. Howeve , some umbrellas are so similar to the basic policy that they do not provide much broader coverage.

A second thing to consider is that an umbrella policy may contain exclusions not found in your primary policies. Altern tively, an umbrella may contain the same type of exclusion as your primary policy, but the exclusion in the umbrella may be broader. For ex mple, the pollution exclusion in your basic liability policy may retain some pollution coverage while the exclusion in the umbrella retains no coverage at all.

Thirdly, some umbrellas contain a self-insured retention, or “SIR.” It represents the amount your firm will pay out of pocket for each occurrence covered by the umbrella but not the basic policy.

Policy Period

Finally, when buying an umbrella, ensure it begins and ends on the exact dates as your primary policies. Policy dates are essential because many umbrellas limit coverage to damages that result from injuries or damage occurring during the policy period of the umbrella.