Why Get Excess Liability Coverage in the Water Business

The water business is a risky business. Whether you’re manufacturing water bottles or selling them on the retail side, many things can go wrong and cause damage to your company. 

Liability insurance protects against just these types of situations. If you own your own business, you must protect yourself from potential lawsuits by purchasing excess liability coverage in the water business. 

In this article, we will tell you why excess liability coverage is important for your water business.

The Water Business Is Full of Liability Risk

The water business is full of liability risk. It’s a high-liability industry, and you can count on your company being sued at some point.

Water businesses have to comply with various laws and regulations, and even minor violations can result in costly fines. Excess liability coverage can provide this business protection against legal costs, fines, and penalties.

You never know when someone will sue you for something that happened with their water system or their home plumbing repair job. In cases like these, the cost of defending yourself against a lawsuit is usually covered by your excess liability insurance policy.

The Potential for High-Cost Claims

The potential for high-cost claims is something to take seriously, especially in the water business. The cost of a single lawsuit can be devastating to a small business or individual. And you can bet that if you’re sued, there will be other lawsuits following close behind.

A single lawsuit can put you out of business, bankrupt an individual and ruin a reputation. Not only does this happen when someone files a lawsuit against your company, but it also happens when people file suits against their neighbors, and those neighbors are your customers’ customers.

A Single Accident Can Be Catastrophic to Your Business

As a water business owner, you likely know better than anyone how a single accident can be catastrophic to your business. 

According to Trading Economics, 13,125 companies went bankrupt in the U.S. in the third quarter of 2022, up from 12,748 companies in the second quarter. An accident in the water business has the potential to lead your company to bankruptcy.

No matter how careful and vigilant you are, accidents happen. When they do, you must have the right kind of excess liability coverage in place so that your company is protected from any financial losses resulting from an accident or other covered claim.

The Need for Protection Against Pollution Claims

If you’re in the water business, you need to be aware of the risks associated with pollution claims. These claims can be extremely expensive and create a lot of hassle for your business if they’re not properly covered by excess liability coverage.

A pollution claim involves a third party seeking compensation from your company due to some kind of environmental incident. They’re hard to defend because often there isn’t much proof that can show who caused the pollution or how much damage was done as a result. 

And without this information, it’s up to each party’s lawyers (and their respective insurance companies) to make their case in court. If you don’t have enough protection against these types of claims, then it could cost tens or even hundreds of thousands of dollars out-of-pocket before all is said and done. Especially if any additional cleanup needs are required before things return to homeostasis levels again

The Need for Protection Against Products Liability Claims

The importance of product liability insurance cannot be overstated. It’s the coverage you need when someone gets injured by your product and seeks compensation against you.

According to Statista, the net premiums, in 2021, from product liability insurance amounted to approximately USD 3.3 billion in the U.S.

Products liability claims are expensive for two reasons:

  • First, it can be difficult to prove your product was not defective or that the damage was caused by something other than your product. Defending these cases can involve costly expert witnesses who can add up quickly.
  • Second, even if the person who has brought suit against you wins their case in court, the amount of money awarded may still be greater than what your business has in liquid assets. Which is why we recommend having excess liability coverage.

Protection Against Third-Party Claims

When you’re starting a water business, it’s important to consider what kinds of claims might arise. For example, if someone suffers an injury on your property and they sue you for damages, this is known as a third-party claim. 

Third-party claims can be made by customers or suppliers as well as employees and subcontractors or even nonemployees. If someone sues you because of negligence in the workplace involving your equipment or other items produced by your company, this is also considered a third-party claim.

The good news is that some excess liability policies also offer protection against third-party claims, including those made by customers or suppliers, which can be important for a water business.


When looking at the water business and liability coverage, it’s important to understand how it all works. As we discussed earlier in this article, the reason you need excess liability coverage is because of your assets. 

According to the EPA- United States Environmental Protection Agency, there are more than 148,000 public water systems in the U.S. If someone sues your water business, it can take a toll on your assets. With excess liability coverage in place, this isn’t something that will happen because an insurance company will pay for these costs instead of you.