Looking for Umbrella Insurance?
Umbrella Insurance is a type of liability insurance that acts as an extra layer of insurance over your current insurance policy, thus the name “Umbrella Insurance”. Umbrella Insurance can be added to existing liability insurance policies, but cannot be purchased by itself. Umbrella Insurance kicks in only after your initial policy maxes out its claims. Purchasing Umbrella Insurance is an excellent way for small businesses and individuals to protect their assets against serious claims. For the most part, umbrella insurance makes sense for high net worth individuals as well as larger businesses, as small businesses and individuals can usually obtain sufficient liability insurance through a regular liability insurance policy.
What Exactly Does Umbrella Insurance Cover?
Umbrella Insurance will protect against all liability claims that your auto insurance, homeowners insurance and public liability insurance would cover. So basically, anything that your primary insurance would normally cover, umbrella insurance covers the exact same thing , but only after your primary insurance cannot pay out any more claims. Keep in mind, the more things your regular insurance policy covers, the more things your umbrella insurance will cover. Keep in mind though, your umbrella insurance premiums are based on the amount of extra coverage (Umbrella insurance is typically purchased in increments of $1 million in additional protection), as well as type of business you run (If you’re purchasing a policy for a business). A business that’s more likely be to sued will have to pay higher premiums than a business that likely will not be sued.
Do I need Umbrella Insurance?
The purpose of umbrella insurance is to protect a business or individual’s assets from paying out claims in case their regular primary insurance policy reaches its maximum yearly payout. A business would need umbrella insurance to protect itself from accidents that could potentially be more than their policy can cover. In most cases, businesses wouldn’t have to pay too much out of pocket for any liability claims, as their primary business liability insurance would have them covered, but these policies have maximums and in the event of a serious accident, simple business insurance won’t be able to settle all claims. In a situation like this, having umbrella insurance would pay off.
Individuals may want to look into umbrella insurance if they want to be on the “safe side” of things. Most auto insurance policies cover upwards of $500,000 in liability damages, but anything after the policy limit, the policy holder has to pay out of pocket. A car accident can cause over $500,000 in damages if the accident is severe, and the only way an individual can protect himself would be to have an auto insurance policy that covers huge amounts in damages or umbrella insurance. In most cases, Umbrella Insurance would be more economical than having to purchase homeowners and auto insurance with high liability protection.