Umbrella Insurance

Umbrella insurance is the term used to define a liability insurance policy that provides protection of the future income as well as the present day assets of the policy holder beyond and above the limits of a standard policy. The term umbrella, in this case, refers to how the policy shields the assets of the insured more broadly than the primary liability coverage.

Umbrella insurance is different from excess insurance. Excess insurance kicks into effect when all other policies have been exhausted. Umbrella insurance is a type of drop down policy that can be used to fill in the coverage gaps of other policies. The primary policies do not have to be exhausted before the umbrella policy goes into effect.

Umbrella insurance is typically just liability insurance purchased in some dollar amount increments to enhance the standard liability insurance policy. The umbrella insurance policy holds all other policies beneath it and protects those policies and the elements of the policies much like an umbrella protects a person in the rain.

A feature of umbrella insurance is it provides coverage for claims that may be exempt from the primary liability policy such as invasion of privacy, slander, libel and false arrest. It may also provide coverage for above the limits of a standard homeowners, boat and car policies.

An umbrella insurance policy is added protection in the event of a law suit. Since society has become litigation happy, lawsuits can happen for the silliest of events and the courts are awarding large amounts of money as rewards for frivolous actions taken by litigants. It also covers the insured in the event a lawsuit is initiated as a result of your actions and it is considered your fault. Without enough insurance power behind you, you run the risk of losing everything you have and then some. It is an unfortunate world when liability insurance has to have additional liability insurance.

An umbrella policy added onto homeowners insurance is fairly inexpensive, especially when the added coverage is considered. Umbrella insurance will cover the insured’s non business related activities anywhere in the world.

Commercial umbrella insurance is available for businesses who want the maximum protection for themselves, their business and their employees. The amount of coverage purchased is up to the business owner, and any amount of added protection will be helpful in the event of a law suit. Business should keep in mind the liability insurance not only covers them but it also covers employees. A business owner cannot always predict how an employee will act or react while on someone else’s property or while conducting business in general. It is always the business owner’s intention to the best and the brightest, but accidents do happen and people do make mistakes.

A commercial insurance agent or broker will be able to advise the business owner of the coverage necessary to cover a good portion, if not all, of a lawsuit. The umbrella insurance coverage will depend on the type of business and service provided or product offered.