Liability insurance is a component of practically every insurance policy imaginable including business insurance, home insurance, and auto insurance. Unfortunately, any lawsuits that take place due to injuries, deaths, and property damage may exceed basic liability coverage. If a lawsuit does unfold, then umbrella insurance will provide an additional layer of coverage to protect one's personal assets or the assets of their business.
What Is Covered?
When an accident escalates into a lawsuit, exactly what will be covered by an insurance policy can be hazy. As a general rule, an umbrella policy or umbrella rider will provide more financial assistance to cover the medical bills, damaged property, court fines, lawyer fees, and any other expenses that come up. This type of coverage can be applied to almost any current policy including personal insurance and commercial insurance.
The Benefits of Additional Coverage
The insured party can decide on practically any amount of coverage imaginable, but most policies start at around $1 million in coverage. If the base policy only provides $30,000 for bodily injuries but the accident was severe, then the umbrella coverage will take care of some or all of the additional medical bills. These riders can also plug some of the gaps in other policies. An example of this would be a car rented while on vacation or an injury that results in the injured party no longer being able to work.
Who Needs It?
Anyone that feels as if they are underinsured with their current private or commercial policy may want to consider umbrella insurance. This is especially important for those in certain lines of work in which lost wages will be significantly higher than the amount covered for bodily injuries. An individual may also want to consider this type of insurance if they work in a field that has a high rate of liability cases. Examples of this would be law enforcement officers, doctors, landlords, and lawyers. Homeowners can also add an umbrella rider to their home or auto insurance if they are susceptible to damage not covered by their other policies such as flooding.