Umbrella Insurance

Umbrella Insurance Policies

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About Umbrella Insurance 

One of the big pluses for consumers who have both car and home insurance coverage is the liability protection that is built-in. This is the kind of coverage that helps safeguard the policyholder from the financial and legal consequences of such things as an individual suing you due to be being injured in a car accident for which you are at fault or hurt on your property due to your supposed negligence. Good liability coverage means your insurance provider will help you in the paying of these claims. The problem is this: Most regular insurance policies will not offer enough protection to fully mitigate larger judgments. This is why umbrella insurance can be so important. 

How it works:

Umbrella coverage, also known as “excess liability” coverage, is a policy that adds to the limits, or in other words, it “supplements” one’s primary policy. These policies will usually be purchased when one wishes extra protection from lawsuits and is generally applied to covering a building or a vehicle.  If one’s usual liability coverage does not cover and protect against liability events, this means that one’s hard-earned assets are exposed. In these cases, umbrella insurance is activated and provides compensation over and above the primary coverage limits.

Kinds of policies:

An umbrella policy is tailored either for an individual or a business. Personal umbrella plans will provide protection from events that are generally associated with real estate or with vehicles. (This often includes watercraft and recreational type vehicles as well.) Commercial supplemental coverage works similarly, but is obtained for a business. Commercial umbrella policies will often come with some exclusions. For instance, they may not provide coverage for claims that are commonly within the purview of workman's compensation or in the form of claims resulting from pollution penalties, etc. 

Who needs this coverage?

The amount and specifics for coverage offered in an umbrella policy will obviously depend on your situation. For instance, should you be the proprietor of a retail store, you would most likely not need as much of this supplemental coverage then would someone who has plans to open a space tourism business… The best thing to do is speak with an insurance professional and perhaps your attorney as well, before making a decision.

The Pluses:

The big benefit in obtaining umbrella coverage is the protection of assets should the policyholder be held legally liable for an injury to another individual or should he or she be responsible for the damage to property. There is a myriad of advantages in holding excess liability insurance. Coverage like this can pay for the costs of having a legal defense when needed and will often cover things that most primary policies leave out, such as protection from libel or slander claims.



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