Why You Should Consider Umbrella Insurance

person under umbrella next to body of waterThere are so many different insurance plans for companies to choose from today, which can make it feel like it is almost impossible to know where to begin. That is why we have put this blog post together; to give you insight into umbrella insurance, and whether you need it. With that being said, continue reading to discover everything you need to know.

Understanding What Umbrella Insurance Is

There is only one place to begin, and this is by explaining what umbrella insurance is and who it has been designed for. Umbrella insurance is a form of personal liability insurance that can be extremely beneficial if you find yourself in a position where you are liable for a claim that is bigger than your typical car insurance or home insurance is going to cover.

Moreover, if you are someone who is lucky enough to own a boat, umbrella insurance is also going to help pick up where your boat’s liability insurance leaves off. Essentially, this is an insurance plan that is designed to go above and beyond what your current insurance plans are offering.

Umbrella insurance will even cover specific liability claims that these policies may not cover, for example, false imprisonment, slander, and libel. You can also expect umbrella policies to protect you if you are being sued for mental anguish, shock, slander, false arrest, malicious prosecution, or accidents that have happened on your rental property, such as your tenant’s dog biting another person.

If you have a rental property, you can expect that the umbrella insurance you take out will offer you greater liability coverage than what you get with your current rental plan. Because umbrella insurance essentially takes your current insurance one step further, many people assume that this is something they don’t need. However, there are many benefits associated with umbrella insurance, so you should not write off this sort of plan before you have considered it properly.

Incidents Where Umbrella Insurance Would Be Helpful

To understand the worth and benefits of umbrella insurance, you need to understand the different types of situations where this type of insurance is going to show its worth. Some examples are:

  • You are on the board of directors at a charity and someone is suing you for a board-related problem
  • You have injured someone by accident, for example, by kicking a ball in someone’s face when playing a sport
  • You accidentally drive your car into a building
  • You cause a serious boating accident or a vehicle accident

Umbrella Coverage Provides Help Beyond Your Base Policy

It is not just about providing you with extra coverage from a monetary perspective, i.e. going above and beyond the payout your current plan provides. Umbrella insurance is also about covering events and incidents that are not covered in typical insurance plans. Some examples are:

  • Invasion of privacy
  • Wrongful entry or eviction
  • Malicious prosecution
  • False detention, imprisonment, or arrest
  • Slander, defamation, or libel

Umbrella Insurance Comes Into Play When Your Current Policies Are Limited

Umbrella insurance will really show its worth when you find yourself in a situation where your current insurance plans are limited. This sort of policy is going to give you that extra coverage where you need it.

For example, let’s say that your business is being sued for $1,000,000 in damages, yet you only have a policy covering $750,000. Your umbrella insurance will cover the $250,000 that your existing policy does not cover.

As a consequence of this, you should think about your umbrella insurance plan as an extension or continuation of your current insurance policy. You should not think about this insurance plan and your other insurance policies as being mutually exclusive, as this is not the case.

What Is Not Covered By An Umbrella Insurance Plan?

When taking out any sort of insurance, it is just as important to understand what the policy does cover as it is to understand what it does not cover! Umbrella insurance is not going to cover damage to your own property or your own injuries.

For example, your homeowners’ insurance is designed to cover any property damage caused because of theft or a fire. If you fall ill, health insurance covers this. You also find that umbrella insurance rarely covers oral or written contracts, intentional criminal acts, business losses, or damage to your personal items.

While umbrella insurance plans can offer you a critical element of protection against lawsuit settlements and judgments, examples of scenarios that are generally not covered include transmission of communicable diseases, as well as damages due to terrorism, war, or nuclear radiation, and intentional acts or injuries.

Of course, it is critical to understand that all policies are different, and so you must look at the terms and conditions for the policy that you take out.

Taking Out An Umbrella Insurance Policy

So there you have it; an insight into umbrella insurance and what you can expect from this sort of insurance plan. We hope that this has helped you get a good understanding of what umbrella insurance is, and when it is suitable.

If you feel that this is the sort of insurance plan you would benefit from, it is vital to choose an insurance provider with care so that you can make sure the policy is fully tailored to suit your individual needs.