There are multiple types of insurance coverage. Based upon the type of insurance you obtain, the insurance policy will cover liability up to a certain amount. For example, you may buy a policy which offers $15,000 in coverage or even as high as $500,000 in coverage. Generally, for commercial liability, you may obtain a policy which could offer $2,000,000 in liability coverage or higher.
It is also not uncommon for companies to invest in umbrella policies in order to supplement their insurance. In the event that you or your employee gets into a car accident, the most important aspect of the insurance policy is to make sure the policy covers the damage of the accident which is claimed against you.
If the policy does not cover the damages for which you are liable, the opposing party will seek additional damages against you by going after your assets. By obtaining a policy that covers the damages of the accident, this assures that your assets will not be sought in addition to the payment by the insurance company.
Another aspect of choosing the appropriate insurance policy is the amount of uninsured coverage and under-insured coverage that the policy covers. Uninsured coverage is important when you are the victim of an accident and someone that hits you has no insurance. The idea that someone who does not have insurance and is thus not liable for their actions is a misconception. Uninsured coverage is part of your policy which will avoid situations such as these. It is advisable to always obtain the most uninsured coverage as possible so that you can fall back on your own coverage and let the insurance company deal with these situations on their end.
The last component of the insurance policy is the under-insured coverage. Under-insured coverage will be used when, for example, the person who hit your vehicle has some insurance but not enough to cover the damages. If your vehicle was completely totaled from the accident, you suffered injuries from the accident, or a combination therein, the damages sought against the responsible party may be greater than their coverage. In that event, you may seek additional damages from the under-insured coverage of your policy to make up the difference in damages sustained. As such, it is recommended that you when choosing an insurance policy, you secure the maximum amount of coverage for under-insured coverage.
Another consideration that you should carefully examine when you obtain an insurance policy is whether the policy calls for a split limit coverage or a single limit coverage. Split limit coverage is when you have multiple people covered under one policy. Single limit coverage is when you only have one person that needs to be covered. For example, if a policy provides $100,000/$300,000 coverage, this means that three people will be covered at a limit of $100,000 each for a total of $300,000. If the policy provides for $300,000 coverage, then one person is covered up to $300,000. Insurance companies will often try to limit your ability to make claims by suggesting a split limit coverage policy. Thus, it is important to always make sure that you are fully aware of the kind of policy you are entering into and not to be deceived by misrepresentations.