Umbrella insurance is a form of liability insurance that supplements your basic liability policies that protect you from major claims and lawsuits. Umbrella policies provide a broader form of coverage when claims are filed on bodily injury and property damage.  There are a few things to consider when you are trying to decide on what coverage limit best suits your personal or business needs.  First to consider is the risks that you may face as a homeowner or renter whether it’s an accident during your commute or activities on your property.  Another is the value of your assets including properties, personal possessions, investments and savings funds; the more assets you have to protect the higher your coverage limit should be.  Lastly, consider future income loss you could face from the consequences of a long-term claim.

Coverage Provided Under Umbrella Policy

  • Bodily Injury Liability – covers cost of damages to another person’s body resulting from an auto accident and injuries sustained by a guest or neighbor.
  • Property Damage Liability – covers the cost of damage to another person’s property associated with damage to vehicles and other property.
  • Personal liability situations such as slander, libel, false arrest, malicious prosecution and mental anguish.
  • Rental Property Ownership – coverage protects against liability you may face as a landlord.

Personal Umbrella Insurance

Personal umbrella policies can be purchased in million-dollar increments from $1 to $5 million.  In the event your vehicle or property policies have exhausted your umbrella coverage would kick in.  For example, if you are found at fault in an accident for injuries you caused to another you are covered up to policy limits.  But if your policy limits do not cover the individual’s medical costs you then would be legally responsible to pay for damages out of pocket.  An umbrella policy would then pay for the additional costs that exceeded your auto or property policy.  An umbrella policy will cover claims otherwise excluded from other liability policies such as false arrest, liability coverage of owned rental units, and libel and slander.  A personal policy will not cover business-related liabilities or consequences of intentionally harmful actions on your part.

Commercial Umbrella Insurance

As a business owner, paying out of pocket for legal fees, medical bills, and damage expenses that exceed the limits of current business policies can be expensive.  Commercial Umbrella Coverage can be applied when a covered claim exceeds the limits of a liability policy.  Umbrella insurance can only cover a certain area meaning there are three underlying liabilities that claims must fall under for protection.  These liabilities include General Liability, Employer’s Liability and Hired and Non-Owned Auto Liability.  Always make sure to read over your policy before purchasing paying extra attention to what the policy covers and excludes.

Common Exclusions:

  • Liquor Liability
  • Worker’s Compensation
  • Employers liability and employment-related practices
  • Pollution
  • Aircraft or watercraft and racing activities
  • Recall of products, work or impaired property
  • Electronic data
  • Flood coverage
  • Property Insurance and Professional Liability claims

Contact our agency for answers to any questions regarding umbrella policies.