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Product GuideCommercial umbrellaThe ideal coverage for rounding out accounts

Product GuideUmbrella liability protectionWhy your clients need it now more than everThere used to be a general perception in the commercial insurance world that million-dollarlawsuits were reserved for mega-corporations. While such “large” litigation continues toclaim headlines, a growing number of smaller businesses are being affected, as well.These days, any businessowner who questions the wisdom of purchasing the extraprotection afforded by an umbrella liability policy need only consider the following:The cost of lawsuits is huge and continues to grow—For the past several years, the annualcost of the American civil liability (tort) system has hovered around 250 billion, and ispredicted to increase for the foreseeable future.1Small businesses pay big dollars for lawsuits—A study by NERA Economic Consultingdetermined that small businesses pay 69 percent of civil lawsuit liability costs, even thoughthey generate only 19 percent of business revenue.2 1 million doesn’t go as far as it used to—Starting with the first day your client purchasesan underlying policy, the limit of liability—say 1 million—steadily declines in terms ofreal-dollar value to where it’s worth significantly less five or 10 years down the road. Thus,your client’s more vulnerable to a sizable liability loss.Another question of liability—yours!As your clients’ trusted advisor, you’re the insurance “expert” they look to for guidance onthe types of coverage they need and the policy limits they should carry.Just one large claim that exceeds the limits of a business’s generalliability, auto, and/or employers liability coverages could causesevere financial difficulty—even bankruptcy. And when that biglawsuit comes, it’s only natural foryour client’s attorney to ask “Didn’tSmall businessesyour insurance agent ever suggest anpay 69 percentumbrella?” If the answer to thatquestion is “no,” you may find yourof civil lawsuitself the target of a different type ofliability costs.lawsuit—one for insurance agentsand brokers errors and omissions.It doesn’t need to come to that, though. As long as you look toHarleysville as your market for commercial umbrella business,you’ll always be well-positioned to meet your clients’ needs.1Litigiousness: Insurers’ Legal Defense Costs. Insurance Information Institute. Article online.2“Companies seek extra liability protection,” Sioux Falls Business Journal, September 19, 20072

Commercial umbrellaA small price to pay for two types of protectionFor a modest premium, a Harleysville commercial umbrella policyoffers your prospects and existing customers:Insurance beyond the limits of underlying coveragesOur umbrella coverage responds when a lawsuit or loss exceedsthe limits of your client’s general liability, commercial auto and/oremployers liability protection. The umbrella extends your client’sliability protection, pays legal defense costs and safeguards theassets of the business.A valuable hedge against inflationHarleysville’s commercial umbrella also can help your clients guardagainst the impact of inflation—and manage the financial exposureto their businesses more effectively. As the graph below illustrates,inflation caused the real-dollar value of consumer prices to shrinksignificantly during the decade ending in 2007. Similarly, your clientwith a 1 million policy taken out in 1997 saw the real-dollar valueof that coverage erode to a fraction of its original limit. So, withunderlying policies providing what amounts to less protection witheach passing year, a commercial umbrella is practically a must formost businesses.Umbrellas grow moreimportant as thereal-dollar valueof underlyingcoverages shrinks.The real-dollar value of 1 million spent on consumergoods in 1997 shrank by nearly one-third over the courseof the decade that followed. Similarly, a 1 million policytaken out in 1997 is worth much less in today’s dollars.Note: Prices are seasonally adjusted.3

Product GuideA solid option for your clients’extra protectionHarleysville’s commercial umbrella policyHarleysville’s commercial umbrella is a state-of-the-art, ISO-standard policy that can roundout your customer’s general liability, commercial auto and/or employers liability coverages*and assure protection in the event of a large liability claim.The specific protection we provide your clients with our commercial umbrella—as wellas their annual premium—will be determined by their type of business and underlyingcoverages. As a “true” umbrella, however, our policy: Provides additional limits abovethe “per occurrence” limits of theinsured’s primary policies Takes the place of the primaryinsurance when primary aggregatelimits are reduced or exhausted Covers some claims that are notcovered by the insured’s primarypolicies, subject to a retentionCovered liability exposures:Our umbrella provides extra protectionfor your client’s business againstlosses arising from the exposures listedin the table on the following page.Umbrella limits: 1 million up to 10 millionMinimum underlying limits:Package, GL, BOP 1 million occurrence/ 2 million aggregateAuto 1 million combined single limitEmployers liability 100,000/ 100,000/ 500,000Professional & miscellaneous coverages 1 million occurrence/ 2 million aggregate* Werequire that a Harleysville company be the underlying liability carrier. We also prefer to carry the automobile andemployers liability coverage. To write over another carrier’s auto or employers liability coverage, the carrier must have aBest rating of A- or better, and the coverage must automatically cover new operations, locations or additional vehicles.4

Commercial umbrellaOur coverage at a glanceContractual liabilityD&ODGOEmployersliabilGarait ygeGaraendoge ville umbrella coverage**(Insuring agreement CU 00 01) Aircraft or watercraft liabilityAutomobile liabilityCBOPExposureAutoBOPUnderlying coverage Bodily injury, property damage Employers liability Bodily injury, property damage (limited)Bodily injury, property damageBodily injury, property damageLiquor liability Personal & advertising injury Pollution liability Bodily injury, property damage (limited)Premises & operations Bodily injury, property damageProducts & completed operations Bodily injury, property damage Bodily injury, property damage (limited)Personal injury, advertising injuryDirectors & officers liabilityChurch officialsCondominium Added by endorsement to theumbrella policy Added by endorsement to theumbrella policyErrors & omissionsEmployee benefits liability Added by endorsement to theumbrella policyPrinters E&O Added by endorsement to theumbrella policy Added by endorsement to theProfessional liabilityBarbers & beauticians; Cemeteries;Druggists; Hearing aid stores;Morticians; Opticians; Pastoral;Veterinariansumbrella policy** For all types of coverage, refer to insuring agreement CU 00 01 for specific details with regard to underlying insurance requirements and exclusions.5

Product GuidePeace of mind for your clients extra commissions for youWriting an umbrella policy over primary coverage gives your agency an opportunity togenerate additional premium and earn extra commissions—while providing your customerswith the added layer of protection they need. In addition, offering a commercial umbrellacan help retain profitable clients that otherwise might look elsewhere for this coverage and,in the process, move their primary insurance to a competitor.Plus, with our commercial lines policy administration system, accessHarleysville//CL , youhave the ability to rate (but not bind) umbrella policies over:SM Commercial auto ISO garage policy CustomPak StarAdvantage Businessowners Program General liability Workers compensation (employers liability)SMMore good reasons for recommending HarleysvilleIn addition to our comprehensive coverage, your clients also can count on Harleysville for: Competitive pricing Risk management tools and services to helpmaintain a hazard-free workplace Exceptional claims service that begins with thereport of a loss using our toll-free number—available 24 hours a day, 365 days a yearWith accessHarleysville//CL,it’s easier than ever to quotecommercial umbrella. Solid financial strength and stability—as well as a proven track record for meetingpolicyholder obligations—all hallmarks of Harleysville since its founding in 1917Considering the time and money your customers have devoted to building their businesses, there’s no better investment than commercial umbrella liability insurancefrom Harleysville to protect them.6