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How Umbrella & Excess Insurance Coverage Can Save Your Business From an Escalating Crisis


By Michael Kirchgessner

Senior Vice President, Commercial Underwriting CNA

One million dollars is not what it used to be. The costs of litigation and adverse publicity can add up quickly for any business following a large loss. And take note: Your losses are not just monetary— your brand and reputation can also be impacted.

All businesses are at risk for a large loss. Due to the speed, that information is shared within 24-hour news cycles and social media, widespread adverse publicity can escalate quickly, becoming a crisis — and bringing catastrophe to your business.

When an unfortunate circumstance reaches a wider audience, the residual harm suffered by a business is quite real. In addition, claims are affected by general increases in loss costs, particularly in bodily injury cases. Healthcare costs have skyrocketed, litigation expenses are trending up and jury verdict awards seem to increase every year.

Here are some factors that impact settlement values, using a hypothetical scenario of an auto accident: Is there a family involved, and do they have young children? Is another motorist or passenger a high wage earner and unable to work again? Did this story spread to social media?

Settlements reflect today's socio-economic landscape, and a jury's perception of what an injured claimant deserves may be based upon articles they have read about athletes or celebrities signing multi-million dollar contracts. With these factors in mind, is the claim in our hypothetical scenario worth $25,000 — or $25 million?

Crisis assistance: How Umbrella & Excess coverage works for you

It is possible to prepare for the unexpected with Umbrella & Excess insurance coverage, which provides additional liability limits above your existing business owners' policy. Here's an example of how Umbrella & Excess coverage works for your business:

Scenario: Due to poor weather, a commercial driver who has made a full stop at a traffic light is rear-ended and strikes a pedestrian crossing the street. Several people are also injured from a resulting pile-up, and the local news is quick to the scene. In addition to interviewing the victims, the camera crew also captures several shots that clearly show the logo for the driver's employer — a manufacturer — and references the manufacturer's name in the report.

How Umbrella insurance helps: The manufacturer is made aware of the accident by the employed driver and is concerned for the well-being of its employees and those injured at the scene. Upon learning of the news report and in anticipation of significant adverse media coverage, the manufacturer triggers Commercial Umbrella & Excess policy, which includes Crisis Management Expense coverage.

What happens next: News outlets broadcast this story using many different media channels. At the onset, this action has the potential to negatively influence the audience's perception of the manufacturer's brand.

How Umbrella insurance helps: With the assistance of their insurer, the manufacturer retains the services of a crisis management firm to implement a prompt communication strategy to counteract the impact of the media coverage. With the assistance of the crisis management firm, the manufacturer is able to control the narrative to the public through appropriate messaging. The insurer reimburses the manufacturer for their covered expenses associated with the crisis management firm as well as other covered expenses that arise from this incident, such as counseling for the manufacturer's driver.

Conclusion: The deployed messaging keeps this story from further damaging the manufacturer's reputation, allowing the manufacturer to focus on the business of producing and delivering quality products to its consumers.

The purpose of this article is to provide information, rather than advice or opinion. It is accurate to the best of the author's knowledge as of the date of the article. Accordingly, this article should not be viewed as a substitute for the guidance and recommendations of a retained professional. Any references to non-CNA websites are provided solely for convenience, and CNA disclaims any responsibility with respect to such websites.


To the extent this article contains any examples, please note that they are for illustrative purposes only and any similarity to actual individuals, entities, places or situations is unintentional and purely coincidental. In addition, any examples are not intended to establish any standards of care, to serve as legal advice appropriate for any particular factual situations, or to provide an acknowledgment that any given factual situation is covered under any CNA insurance policy. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions, and exclusions for an insured. All CNA products and services may not be available in all states and may be subject to change without notice.


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