What is Umbrella Insurance and Why It’s Important

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What Is Umbrella Insurance?

Umbrella insurance is a type of supplemental insurance that can be added to your existing personal insurance coverage. This added layer of protection against different elements of risk, provides excess liability above the limits of your basic auto and homeowners insurance, for example.

What Does Umbrella Insurance Cover That My Other Policies Do Not?

Much like the homeowner who was sued for the head injury of a visitor that occurred in her backyard, you could also find yourself engaged in a lawsuit one day. If you are involved in an accident, or if one happens on your property, the liability coverage from either your homeowners, auto or other insurance policy (depending on the type of accident) may kick in. If the damages exceed what your base policy covers, your umbrella coverage can help you pay the rest of what you owe. Umbrella insurance can also provide your family with:

  • Personal injury coverage (defamation of character, invasion of privacy, libel, slander)
  • Defense coverage for attorney fees and other legal costs.

Personal umbrella insurance does not cover business losses, contract disputes, personal belongings, criminal or intentional acts.

If you are a small business owner, you know how much an accident or litigation can be devastating to your organization. That is why you’ve done your due diligence and taken out insurance to help protect your business against various risks like personal injuries, property damage and auto accidents; however, chances are your insurance policies come with a liability limit. When that limit is exceeded, you could find yourself footing the remainder of the bill out of your own pocket. That’s where umbrella insurance comes in.

Talk with your Rand Insurance account manager to learn more about umbrella insurance.

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