Umbrella Insurance – How It Works & What It Covers

What is Umbrella Insurance?

Umbrella Insurance provides additional liability coverage that can help protect assets such as your home, car and boat. It can also help cover defense costs, attorney fees and other charges associated with lawsuits. Umbrella insurance coverage helps protect you from the costs of covered claims when those costs exceed the policy limits of your homeowners insurance, auto insurance or boat insurance policies. An umbrella policy can also help cover defense costs when you are being sued for damages to someone else’s property or injuries caused to others in an accident.

What Does Umbrella Insurance Cover?

Whether it’s a serious car accident involving extensive medical bills or an incident on your property, you may quickly find yourself responsible for damages that exceed the limits of your auto, homeowners or boat policies. That’s when having an umbrella insurance policy can provide coverage that goes beyond the limits of your primary coverage.

Umbrella Insurance can help provide coverage for:

• Additional liability insurance which can help protect assets such as your home, car and boat.
• Claims like libel, slander, defamation of character and invasion of privacy.
• Legal defense costs like attorney fees and other charges associated with lawsuits.
• Liabilities that happen outside the United States.

A personal umbrella insurance policy is a valuable addition to any auto, homeowners or other policy for extended personal liability protection.

In today’s world, anyone can face a lawsuit, even if you’ve done nothing wrong. That’s why it’s more important than ever to consider adding an umbrella policy as an extra layer of protection for your assets and your peace of mind.

What is Not Covered by An Umbrella Policy?

Generally, damage to your own personal property is not covered under a personal umbrella policy.

Other examples of coverage not included in a typical umbrella policy are:

• Business losses. Damage to your business property or losses related to the running of your business generally would not be covered by a personal umbrella policy. This exclusion applies even if your business is operated out of your home.
• Intentional acts. A personal umbrella policy isn’t designed to protect you from liability connected with your own intentionally harmful behavior; for example, if you intentionally harm a visitor to your home.

Umbrella policies are typically very affordable and can be a great way to help protect yourself against the potentially devastating costs of major claims that exceed the limits of your primary home and auto policies.

Umbrella insurance polices can also be purchased as an extra layer of coverage for a business. ↓

How is a Commercial Umbrella different from Personal Umbrella Insurance?

Commercial umbrella insurance provides extended coverage for employer’s liability, general liability insurance, commercial auto, and workers’ compensation.

Personal umbrella liability insurance provides extended coverage for an individual’s homeowners insurance, auto insurance and watercraft insurance.

Who Needs Umbrella Liability Insurance?

• If your business operates on someone else’s property: For example, you own a small business painting the exteriors of houses. Because there is an increased risk of property damage to their home, it puts you at an increased risk of surpassing the limits of your liability policy.
• If customers or clients are frequently on your property: Business owners recognize the necessity of general liability insurance but don’t always realize that the increased traffic in a store or retail space can increase the number of claims or potential for greater losses.
• You own a small business in an industry with an increased risk of your employees being injured: If an employee is injured and your workers’ compensation insurance isn’t sufficient, you and your business can be held liable for any remaining money the courts award them.

Whether you are an individual looking to project your personal assets, or a business owner looking to add an additional layer of coverage to protect your business, our team as RSS has you covered. Contact our office today to speak with one our insurance advisors about the benefits of adding an umbrella policy to your insurance program.

Source: Travelers Insurance