As a business owner in the maritime industry, you may have difficulty anticipating when a catastrophic liability event may come your way. For example, you may own a marina, and the boats get damaged. A commercial general liability policy might not provide adequate coverage in such a case. The same problem applies if you tow boats and they get damaged during the trip.
One tool you have to protect your business from bankruptcy is bumbershoot insurance. The policy provides insurance protection for dry and wet incidents in the maritime industry by extending the coverage of underlying insurance policies. Keep reading to find out more about this vital insurance policy for your maritime business.
The typical bumbershoot insurance definition is that this policy is an excess or umbrella liability protection for wet marine exposures. Bumbershoot liability insurance has several different non-marine and maritime liability protections it enhances:
Most bumbershoot insurance policies add to the protection you would receive under an umbrella liability policy. Bumbershoot umbrella insurance fortifies protections for maritime-related liabilities, which include:
Ship repairer's legal liability–Provides insurance protection for ship repairs causing damage to a vessel under repair or alteration
Collision and salvage costs–Helps your maritime business cover costs related to marine collision accidents and the cost to salvage your vehicle from the water
Tower’s liability–Allows insured to get protection for their operations where they tow third-party vessels in the water
Vessel pollution liability–This covers your business for costs related to a vessel causing a pollution event, including cleaning it up
Marine terminal operator's liability–Allows your maritime business to get covered for damage to cargo while your vessels are importing and exporting materials. The World Trade Organization estimated in 2019 that US exports accounted for 20% of all sea transport
Protection & indemnity–This policy covers all maritime liability risks related to maritime vessel operation. Some exceptions to this protection include worker injuries and collision coverage
A bumbershoot umbrella policy can extend coverage for non-marine liabilities from a primary policy, including:
Bodily injury liability–Protects your business against third-party claims of bodily injury from your products and services. This coverage is included in general liability insurance
Personal injury liability–This policy will cover your business when sued for personal injury claims like copyright infringement
Property damage liability–Covers any costs related to third-party property that your business damages
Auto liability–Adds protection for liability associated with on-road vehicle collisions.
Employers liability—This policy protects you from the costs of dealing with employee lawsuits resulting from workplace injuries
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There are different situations in which your bumbershoot policy will not cover you. See some of these situations below.
Bumbershoot insurance will not include protection against physical damage to your business property. You would need commercial property insurance or a business owner's policy to get that coverage.
Commercial property insurance protects your business building from events like fire, theft, and weather. It will not cover everything, however. Certain events like floods and earthquakes will need separate coverage.
If your business has malfunctioning equipment or it gets stolen from your business, you would need insurance policies like commercial property, inland marine, or equipment breakdown insurance.
Inland marine insurance protects your tools and equipment when they are being transferred over the land and when they are used at job sites. Equipment breakdown covers specific causes of damage that are usually excluded, like mechanical failure or electronic shortage.
Suppose one of your employees steals client property or commits other acts of commercial crime. In that case, you will need employee dishonesty protection to cover the financial losses you experience. Employee dishonesty coverage typically includes fidelity bonds that reimburse you when your employee embezzles money, forgers signatures, and steals property.
Some clients may require employee bond protection before they do business with you so that their assets are protected. Employees may access client financial data, social security numbers, credit card data, and identifying information like addresses.
Since bumbershoot insurance is an excess policy, it will only kick in when an underlying policy that it covers has reached its policy limits. You will want to pay attention to how much your claim costs to know when your bumbershoot policy will kick in.
Mistakes and oversights in your professional business operations are not covered by general liability insurance or other similar policies that bumbershoot insurance can enhance.
Instead, you will need coverage from a policy called professional liability insurance. This policy will cover missed deadlines, undelivered cargo, and negligence in your business operations if you get sued by a client.
While bumbershoot insurance does not cover these events, you can get an excess liability insurance policy to boost professional liability insurance limits. This policy is sometimes called professional indemnity insurance and errors and omissions insurance.
Usually, businesses that interact with the sea and the maritime industry are prime candidates for bumbershoot insurance.
Shipyards occupy large property areas and are concentrated on repairing, constructing, and refurbishing marine vessels. They would want bumbershoot insurance to better protect them from liability claims.
Marinas are responsible for storing and safekeeping their customer's marine vessels throughout the year. They can also offer services that benefit from bumbershoot insurance coverage, like boat rental and boat maintenance.
An international freight business is responsible for transporting goods and their safety until they reach their destination. This business would want coverage for the cost of broken items during the journey and collision coverage for their vessels as they head into international waters.
Charter vessel businesses are responsible for transporting pay customers on tours to explore various points and places of interest. They would want coverage to protect themselves from third-party liability and other indemnity costs related to the marine vessels they use.
Any marine business offering boat towing services would significantly benefit from the extended coverage of bumbershoot insurance. Tower’s legal liability would protect your business from the potential risks of towing another vessel, like accidentally causing a customer’s vehicle damage when it is under your care.
Your bumbershoot insurance policy needs will vary based on your business type and situation. For example, some businesses purchase bumbershoot to help fulfill contracts that require $2 million or more limits. Usually, umbrella bumbershoot insurance comes in $1 million increments, so you can purchase the exact coverage you need for an event like a lawsuit.
No. Since bumbershoot is an excess policy, you need to have an existing policy for it to enhance. You can endorse bumbershoot insurance to the following policies:
This policy will cover third-party property damage, bodily injury, and personal injury like copyright infringement. General liability insurance will have a typical coverage limit between $1 million and $2 million and covers incidents that include:
Commercial auto policies cover your land-based business vehicles when they get into accidents on the road with other vehicles. You get coverage when your vehicles are performing business-related activities for liability claims, damage from collisions, and damage to your vehicles from other sources.
Without a compatible policy, you cannot buy bumbershoot insurance. One example of incompatible insurance is commercial property insurance. Bumbershoot insurance typically won’t boost the limits of commercial property insurance.
Depending on your insurer, a bumbershoot policy will have excess coverage limits of up to $100 million. This limit influences the price of your policy. Other factors affecting price are your payroll size and business location.
Self-insured retention is the dollar amount you agree upon with your insurer that must be paid before your insurance policy will cover defense and indemnity. Before the self-insured retention dollar amount is hit, the policyholder can handle claims as they see fit. After the limit is hit, the insurer takes over.
This provision stands in contrast to a deductible policy. Insurance policies with a deductible will let the insurance company handle the claims themselves. Then the insurer seeks compensation for the deductible amount from the insurance holder.
The average bumbershoot insurance cost is $84 per month or $1,008 per year for a $1 million worth of coverage. Factors that affect premiums are revenues, location, business history, and claims history. Here’s a table showing the cost of a $5 million bumbershoot insurance from the best companies:
|Cost per Month
|Cost per Year
|Comparing bumbershoot insurance quotes online
|Comparing bumbershoot insurance quotes over the phone
|Bumbershoot policy features
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The next section of the article will examine some companies that offer excellent policies for maritime businesses, including bumbershoot insurance. Read some of the reviews below to know their pros, cons, and average rate for a $5 million bumbershoot policy.
Choose your policy from multiple partners
Allows you to request quotes without committing to a purchase
Lots of coverage options to pick from
Doesn’t underwrite bumbershoot insurance policies
CoverWallet is a top-rated company with a digital marketplace for comparing policies between insurers. The company maintains an A+ rating from the Better Business Bureau and serves thousands of insurance customers yearly. CoverWallet covers the majority of US states besides Rhode Island and Vermont.
Best for: Comparing bumbershoot insurance quotes online
Average cost: $59 per month
Our rating: 10/10
Solutions-oriented culture helps you figure you what you need
The quick response rate on the phone for quotes
Helps you narrow down your policy options and insurers
Doesn’t have a mobile app for convenience
Tivly has over 200 partners to choose from to get your bumbershoot policy protections up and running. This insurer has a dedicated section of their platform for bumbershoot insurance which you can learn about before purchasing. Tivly has an A rating from the Better Business Bureau and over 20 years of experience in the insurance industry. Call now to compare quotes over the phone. Call now to compare quotes over the phone.
Best for: Comparing bumbershoot insurance quotes over the phone
Average cost: $64 per month
Our rating: 10/10
Access to 13,500 agents and brokers in the US, Canada, UK, and Ireland
Newly acquired organizations get automatic 180 coverage
Middle-of-the-road for customer satisfaction
Travelers offers a bumbershoot or marine umbrella policy that gives you marine coverage, general liability, auto liability, and employer’s liability. You get crisis management service expenses included in your policy for no cost. You can extend coverage for hull insurance, marine property, and watercraft liability. Travelers have total assets of approximately $29 billion, as reported in 2021.
Best for: Bumbershoot policy features
Average cost: $69 per month
Our rating: 10/10
Lonnie Bell Insuranker
Policy Type: Business Insurance
Company name: Employers Insurance
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!