Commercial Insurance

How Commercial Umbrella Insurance Protects Businesses From Catastrophic Claims

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One Claim Can Exceed What Standard Coverage Handles

Business owners often assume their general liability and commercial auto policies provide enough protection against a lawsuit. In many cases they do, but a single serious claim can sometimes exceed those policy limits entirely. RKM Insurance Agency works with California businesses that are surprised to learn how quickly a catastrophic claim can outpace standard coverage.

What Commercial Umbrella Insurance Actually Does

Commercial umbrella insurance provides an additional layer of liability protection once the limits of an underlying policy, such as general liability or commercial auto, have been exhausted. Rather than replacing existing coverage, it extends protection further, helping businesses avoid paying significant out-of-pocket costs after a major claim or lawsuit.

Why California Businesses Face Elevated Exposure

California’s dense population, high cost of living, and litigious business environment can increase the likelihood and size of liability claims. A serious injury on a commercial property, a significant auto accident involving a company vehicle, or a large-scale lawsuit can quickly reach amounts beyond typical policy limits. Businesses operating in industries with more public interaction or higher risk activities often face this exposure most directly.

Common Situations Where Umbrella Coverage Matters

  • A customer injury claim that exceeds general liability limits
  • A commercial vehicle accident resulting in significant third-party damages
  • A lawsuit involving multiple parties or extensive legal costs
  • Claims that combine bodily injury and property damage across several policies

Evaluating Whether Umbrella Coverage Fits Your Business

Not every business carries the same level of risk, which means umbrella coverage needs can vary widely. Reviewing your current policy limits alongside your business’s specific exposures helps determine whether additional protection makes sense. RKM Insurance Agency helps California business owners evaluate this coverage as part of a broader commercial liability and property insurance strategy. To learn more, visit our commercial umbrella insurance page.

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Sign Damage: Why Your Coverage May Be Thousands Short

Posted on by Brandon Meyer

Dear Valued Customers,

Sign Damage: A Costly Reminder

The photos at the bottom of this Newsletter may make this look like a minor loss — but once repairs were complete, the total cost came in at over $13,000. Never underestimate the cost of repairing or replacing a damaged sign. As sign technology has advanced, so has the price tag: a new sign can range anywhere from $5,000 to $40,000 depending on size and features.

So the question is: how well is your sign actually covered?

Most policies carry limited sign coverage — often a $1,000 to $5,000 sub-limit — and some carry none at all. It’s worth reviewing your policy closely to confirm you have enough coverage for a total sign loss, not just minor repairs.

Why You Can’t Rely on the At-Fault Driver’s Insurance

If a vehicle strikes your sign, that driver’s auto insurance is technically responsible. But in California, the state’s minimum required property damage coverage is only $5,000 — and some drivers carry no insurance at all. If the damage exceeds what their policy covers (or they’re uninsured), you’re left covering the difference unless your own policy protects you fully.

Don’t Let Wear & Tear Work Against You

As we’ve mentioned in past newsletters, wear and tear exclusions can also affect sign claims. Sprinklers that keep your landscaping looking sharp can also be quietly corroding or water-damaging your sign’s base over time. If a sign falls due to poor maintenance rather than an external event like a collision, your claim may be denied entirely.

We recommend a once-a-year maintenance check — sanding, repairing rust, and addressing any structural wear — to keep your sign both looking good and properly protected.

The Bottom Line

Review your policy’s sign coverage limit today, not after an incident. A modest coverage increase now could save you thousands later.

Thank you for your continued business.

Sincerely,
The RKM Team

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The Hidden Risk of Hiring Contractors and Sub-Contractors

Posted on by Brandon Meyer

Dear Valued Customers,

In our continued effort to keep you informed on the latest trends and claims, this month’s newsletter focuses on an issue that has recently cost some of our insureds dearly: hiring contractors and sub-contractors.

Over the past years, we’ve seen two large claims involving contractor and sub-contractor employees — and both offer important lessons for protecting your business.

Case #1: A $6.5 Million Verdict

Our insured hired a legitimate, licensed contractor to perform work on their premises. One of the contractor’s employees was injured on the job.

While that employee was compensated through the contractor’s Workers’ Compensation policy, they didn’t stop there — they also sued our insured directly, arguing the injury occurred on the property they owned. The case went to trial, and the jury ruled against our insured, awarding the injured worker $6,500,000.

Case #2: An Uninsured Sub-Contractor Chain

In the second incident, our insured hired a sub-contractor to perform work on the premises. That sub-contractor, in turn, hired another sub-contractor to help with the job — without our insured’s knowledge or approval.

That second sub-contractor was seriously injured while working on the property. Neither he nor the sub-contractor who hired him carried proper insurance, such as Workers’ Compensation, and neither had signed an indemnification agreement with our insured. Now, the injured worker is suing our insured directly. Given the severity of the injuries, this claim has the potential to be substantial.

Lessons Learned

These two cases highlight two critical steps every property owner should take before hiring outside labor:

1. Verify insurance — every time, for every contractor.
Before any contractor or sub-contractor begins work on your property, confirm they carry adequate insurance and require them to name you on their policy. Specifically, they should:

  • List you as an Additional Insured on their General Liability policy
  • Provide a Waiver of Subrogation on their Workers’ Compensation policy
  • Supply a Certificate of Insurance as proof of both

These requirements are simple for a contractor to add to their existing policy, typically at little to no extra cost — but they can make the difference between a covered incident and a lawsuit that lands squarely on you.

2. Consider raising your liability limits.
Jury awards continue to climb, and many of our insureds currently carry only $1,000,000 in liability coverage — which may not be enough to cover a serious injury claim. A commercial umbrella policy can extend your coverage up to $5,000,000 or more, often at a relatively modest cost. Reach out to your agent to discuss your options and get pricing.

The Bottom Line

We understand that controlling costs when hiring contractors and sub-contractors matters to every business. But hiring properly insured contractors — and confirming that coverage in writing before work begins — can protect your business from a claim that could otherwise put your assets at serious risk.

If you have questions about verifying contractor insurance or reviewing your liability limits, please don’t hesitate to reach out.

Sincerely,
The RKM Team

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ADA Compliance: What Every Gas Station Owner Needs to Know

Posted on by Brandon Meyer

To Our Valued Customers,

This edition focuses on Americans with Disabilities Act (ADA) violations — a growing source of costly lawsuits for gas station and convenience store owners.

We’ve attached a standard ADA compliance checklist for your review and files at the bottom of this Newsletter. We encourage you to share a copy with your managers to help prevent these types of lawsuits going forward.

A Brief History of ADA Lawsuits

A few years ago, many of our gas station customers were hit with lawsuits claiming that pump keypads were installed at an incorrect height. This triggered a wave of litigation, with businesses spending thousands of dollars to lower keypads — only to face further lawsuits and additional costs afterward.

The backlash led California State Senator Bob Dutton to pass legislation designed to add checks and balances, making it harder for attorneys to file these lawsuits so easily.

However, attorneys have since found a workaround: rather than suing in California state court, they now file in federal court, which largely bypasses the protections built into California’s statutes and regulations.

What You Can Do

You generally have three options when it comes to ADA compliance:

1. Hire a Certified Access Specialist (CASp) — Recommended A CASp is a professional tested and certified by the State of California to assess ADA compliance. If you follow a CASp’s recommendations, you become eligible for a 90-day hold on any legal proceedings, along with a possible early evaluation conference — giving you time to fix issues before facing a lawsuit. You can search online for a “CASp” specialist in your area.

2. Purchase Insurance This is not the strongest option. ADA-specific coverage is difficult to find, expensive, and typically comes with deductibles ranging from $10,000 to $25,000.

3. Do Nothing and Wait to Be Sued This is by far the worst option — and the most expensive, once legal fees and settlement costs are factored in.

A CASp evaluation typically costs between $500 and $800 — a small investment that can end up saving you thousands of dollars, along with considerable time and stress.

Common ADA Violations We’re Seeing

The most frequent violation we encounter at gas stations today involves handicap parking. Page 5 of the attached checklist outlines the required layout. During a recent site visit, we found a station with its van-accessible space positioned on the left side of the ADA parking space — a violation. The law requires:

  • One 8-foot ADA parking space marked in blue
  • An adjacent 8-foot striped van-access aisle positioned on the right, to accommodate wheelchair lift deployment

Other common violations RKM has identified at gas station properties include:

  • Bathroom mirrors mounted too high
  • Coat hooks or hangers mounted too high
  • Mini-mart aisles narrower than the required 36 inches (35 inches is already a violation)
  • Cash counters too high for a person using a wheelchair to reach

The Bottom Line

A CASp inspection is a modest expense that can prevent a much larger legal and financial headache down the road. We strongly encourage you to review the attached checklist and consider having your property assessed.

As always, we’re here to answer any questions you may have.

Sincerely, The RKM Team

ADA chechlistDownload

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Is Your Roof Insurance-Ready? Plus: A Key UST Legislative Update

Posted on by Brandon Meyer

Dear Valued Customers,

It’s been a crazy year and we hope this newsletter finds you well. Today, we bring you a crucial legislative update that impacts Underground Storage Tank (UST) owners and operators in California. Assembly Bill 1115 (AB 1115) has been enacted, extending the deadline for the UST Cleanup Fund and related programs.

Key Provisions of AB 1115:

  • Extension of Cleanup Fund and Companion Programs: AB 1115 extends the UST Cleanup Fund and companion programs, including Replacing, Removing, or Upgrading (RUST) grants and loans, through January 1, 2035.
  • Financial Responsibility Mechanism Extension: UST owners and operators will now be able to use the UST Cleanup Fund as a financial responsibility mechanism until December 31, 2034.

For further details or inquiries related to AB 1115, we encourage you to visit the official California State Legislature website or contact the relevant regulatory authorities.

We will continue to keep you updated on developments that may impact your business or industry.

Roofing Maintenance Reminder:

We also want to take a moment to remind our valued customers about the importance of maintaining your building’s roofing system. ALL insurance companies are now asking, on buildings that are over 30 years old, when was the roof either updated or replaced.

A well-maintained roof is crucial for safeguarding your investment and ensuring the longevity of your property.

Key Roofing Maintenance Tips:

  1. Regular Inspections: Schedule regular inspections to identify any signs of wear, damage, or potential issues. Early detection can prevent more extensive and costly repairs.
  2. Clean Gutters and Drains: Ensure that gutters and drains are free from debris to prevent water buildup and potential damage to your roofing system.
  3. Address Leaks Promptly: If you notice any leaks or water stains inside your building, address them promptly. Ignoring leaks can lead to more significant issues and compromise the integrity of your roof.
  4. Trim Overhanging Branches: Overhanging branches can cause damage to your roof, especially during storms or high winds. Trim branches to prevent them from scraping or puncturing the roofing material.
  5. Professional Roofing Inspections: Consider hiring a professional roofing contractor for comprehensive inspections and maintenance. They can provide expert guidance on the state of your roof and recommend necessary repairs or upgrades.

A well-maintained roof not only protects your property but also gets you in better favor with the insurance carriers. We encourage you to prioritize roofing maintenance as part of your ongoing building management strategy.

Remember, you can view our previous ongoing newsletters any time by visiting our website at  www.RKM-INS.com.

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Does Commercial Insurance Cover My Business’s Vehicles?

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Do you own a small business in California and need commercial insurance? The experienced team at RKM Insurance Agency can help. As an independent insurance agency serving businesses throughout California, we work with multiple insurance carriers to help you compare options and find commercial insurance coverage that fits your business needs and budget.

What Is Commercial Insurance?

Commercial insurance is designed to help protect businesses from financial losses related to property damage, liability claims, employee injuries, and other operational risks. Because no two businesses are exactly alike, commercial insurance policies can be customized to match the size, industry, and specific exposures of your business.

What Does Commercial Insurance Cover?

Commercial insurance can include a wide range of coverages, such as commercial property insurance, general liability insurance, workers’ compensation, and professional or cyber liability, depending on your operations. The types of coverage your business needs may depend on factors such as the products or services you offer, whether you have employees, and where you operate in California.

Does Commercial Insurance Cover Business Vehicles?

Commercial auto insurance provides coverage for vehicles used for business purposes, such as cars, vans, and trucks. In California, businesses are required by law to carry liability insurance for vehicles operated on public roads. An insurance professional at RKM Insurance Agency can help you select a commercial auto policy that meets state requirements while also protecting your business from costly accidents and claims.

Does Every Business Need Commercial Insurance?

Some types of commercial insurance are required by law in California. For example, businesses with employees must carry workers’ compensation insurance, and businesses that operate vehicles must have commercial auto insurance. Other coverages may not be legally required, but can be essential for protecting your business from lawsuits, property losses, and unexpected disruptions. An insurance agent can help you determine which policies are required and which are strongly recommended for your business.

Contact RKM Insurance Agency for Commercial Insurance in California

If you are shopping for commercial insurance in California, RKM Insurance Agency is here to help. Our knowledgeable professionals work closely with business owners to explain coverage options, compare policies, and help secure insurance solutions tailored to their operations. Contact RKM Insurance Agency today to discuss your commercial insurance needs or to request a personalized quote.

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