Umbrella Liability Insurance

What Does Umbrella Liability Insurance Mean?

Umbrella liability insurance is a policy that provides coverage beyond the limits of a primary policy or policies, or it may serve as a primary policy to cover losses not included in other policies. In other words, it offers additional coverage for amounts that exceed the limit of a standard policy, effectively extending the coverage of the main policy.

Insuranceopedia Explains Umbrella Liability Insurance

Umbrella liability insurance can be either a personal or commercial policy. A personal policy extends the basic coverage provided by main liability policies, such as auto, home, or renter’s insurance. In a commercial policy, it kicks in when business auto liability or other general liability coverage reaches its limit. Businesses with higher exposure to lawsuits or large claims can learn more about how commercial umbrella insurance works and what it typically costs. In essence, umbrella liability insurance offers broad coverage that supplements existing policies once their coverage limits are exceeded. Because the umbrella only pays after underlying limits are used up, it is worth knowing how much liability insurance you actually need on your base policies before adding one.