Specialty Insurance

Who Needs an Umbrella Insurance Policy?

By September 10, 2018 No Comments

In today’s world in which lawsuits fly left, right, and center, you never know when you might find yourself in court. Accidents are bound to happen and a multitude of things in your home or business can lead to an expensive lawsuit. Although you might carry basic liability coverage, ask yourself what might happen if you are sued and that policy’s limit is exceeded. Will you and your assets be safe? This is the primary reason why each individual and business should have an umbrella insurance policy.

What is Umbrella Insurance?

Umbrella insurance is secondary form insurance that usually requires you to have a primary policy in place. The umbrella policy kicks in when the primary policy reaches its pre-determined max payout. It serves as an additional liability insurance coverage designed specifically to protect you and your assets from claims and expensive lawsuits that may exceed the limits of your primary liability policy.

An umbrella insurance policy covers a wide range of situations. Typically, covered claims are for hurting someone (bodily injury) or damaging someone else’s property, but umbrella liability policies will also include coverage for imprisonment, false arrests, and even slander. The two common types of this coverage are the personal and commercial umbrella insurance policy. Now that you know what an umbrella policy is, lets us try to address the issue of why it is important to have it and who needs it.

Why Is Umbrella Insurance Policy Essential?

A personal umbrella policy will protect your assets above and beyond the limits of your personal home or auto insurance if you are sued for causing an accident or damaging someone else’s property.

For instance, if a guest in your home slips and falls injuring himself/herself, you may be liable for the hospital bill plus a lawsuit, if the injured individual decides to sue you because of the accident. Although your home insurance may cover the costs, you may be left helpless if the costs go beyond your policy limits. In such a case, you will need umbrella coverage to cover the extra costs.

Commercial umbrella insurance is also important to businesses. Depending on the nature of your business, an accident could happen, and the costs related to the accident may exceed your commercial liability insurance policy limits leaving your business in a dangerous situation. Having a commercial umbrella policy in such circumstances could be invaluable.

Who Needs Umbrella Insurance Policy?

Almost every individual and business requires this type of coverage. If you have accumulated personal wealth such as a home, rental properties, or other investments, make sure that you acquire a personal umbrella policy to protect your assets against unforeseen risks.

It is always good to remember the fact that the more property you own, the more you will have to lose in case of unexpected liabilities. As you build your wealth and assets over the years, an umbrella insurance policy becomes more and more critical. In addition, as you get additional responsibilities in your life such a marriage and children, your insurance needs will begin to widen, and the amount of potential liability begins to rise significantly, hence the need for a personal umbrella policy.

You should also consider purchasing a commercial umbrella insurance policy if you run a business to protect your enterprise from costly lawsuits and unforeseen liabilities that may occur. If you run a business that serves high-net-worth clients or you want to avoid dipping into your personal savings in case of a catastrophic lawsuit, make sure that purchase a commercial umbrella insurance policy.

Contact Brashears Insurance today for all of your insurance needs.