What is Umbrella Liability Insurance?

Author: The Massey Clark Fisher Team | Monday, Mar 03, 2014

Tags: education • insurance • liability • insurance • tips • umbrella insurance •

Many people wonder what umbrella insurance is. Perhaps you know a little bit about it, but you’re only familiar enough to know that it covers the excess liability you may hold. A good way to think of umbrella liability insurance is as a blanket policy. In other words, it is going to cover you all over. Insurance is meant to protect you and your family’s financial security, and that holds true for an umbrella policy, whether it is for your individual homeowner’s insurance or for your business’ commercial coverage.

Just what does an umbrella liability insurance policy cover?

Essentially, umbrella insurance is going to offer you extra coverage that goes beyond your current insurance policies that cover your home, car, or other assets. It will also cover additional claims that might not be part of those original policies, such as libel suits or liability on rental properties. Bottom line: an umbrella policy is going to kick in and cover when your other insurance policies have reached their limit. This way you know you’ll be protected.

Here are examples of umbrella insurance coverage.

As for the specifics, consider these scenarios where an umbrella insurance coverage will be a big benefit:

  • Bodily Injury Liability: This will provide reimbursement for damages to someone who might become injured in a car accident where you were at fault. It also offers extra coverage in case your dog bites a passerby or someone has a slip and fall accident in your home.
  • Property Damage Liability: In case you are at fault when a property is damaged, your umbrella policy will fill in the gap left behind with your average insurance payout. In other words, you won’t be out of pocket for huge amounts.
  • Owners of Rental Units: You’ll be protected if someone has an accident on one of your rental properties and they decide to sue. Even if a tenant’s dog bites someone and you’re held responsible, your umbrella coverage will step in for added protection.

Additionally, your umbrella policy is going to provide another layer of protection against slander or libel lawsuits brought against you. There is no escaping the fact that we live in a litigious society. With an umbrella insurance policy, you’ll have added peace of mind knowing your assets, excess liability, and financial future can be protected.