Umbrella Liability Insurance & Its Wide Variety of Coverage
- Coverage Options
- 10.29.2024
By Sheryl Homer
How many things can fit under one umbrella? Picture this: You’re standing in the rain, and you immediately take cover under the nearest tree. The tree provides you with shelter to stay dry, but the raindrops fall off one leaf to the next until they fall right on top of your head. These little cracks between the leaves cannot be covered, but you could stay completely unscathed if you had an umbrella. This is exactly how umbrella liability insurance works. When your original business liability plan slips through the cracks, umbrella liability is there to save the day.
Where Umbrella Insurance Comes in Handy
Umbrella liability insurance covers a wide range of liabilities and can protect against claims not fully covered by underlying policies, such as:
- Certain types of legal judgments or settlements
- Claims including personal injury or defamation (when not previously covered)
Umbrella policies typically come with high coverage limits, which provide significant protection against catastrophic events. For instance, a business facing a multi-million-dollar lawsuit could find that its general liability policy’s limit is insufficient, but an umbrella policy can cover the difference.
The Perks of Umbrella Insurance
Umbrella insurance enhances the overall risk management strategy of a business by providing peace of mind that even the most severe claims will not result in substantial financial hardship. Umbrella liability insurance is a vital risk management tool for businesses, offering additional coverage and financial protection beyond the limits of standard liability policies. It ensures that businesses can withstand a storm underneath both a tree and an umbrella for extra protection.