Personal Umbrella insurance (Excess Liability) policies provide additional limits of coverage over and above other liability policies. For example, your Personal Auto and Homeowners policies may have $300K limits. If you want to carry $1M in total limits, then you may need to purchase an Umbrella. Limits should be selected based on your assets at stake and your income.
In a 2015 report by the Insurance Information Institute, it was shown that $22K was the average amount spent on defense and settlement expenses for homeowners liability claims. Many of the more severe claims rose well above $500K-$2M. If your net worth or your annualized income is large enough to be attacked in a major lawsuit, then you should consider the very inexpensive option of a personal umbrella insurance policy. It can cost as little as $200 per year per $1M limit.
Failure to Schedule Underlying Insurance Limits
The most obvious coverage gap for umbrella policies is the failure to schedule the underlying policies. Similar to this gap, you may also fail to purchase high enough limits in the underlying policies, leaving a gap at the “attachment point”.
Personal Umbrella Insurance, clearly, won’t protect you from every type of exposure your business may face. As a result, there are other types of insurance designed to meet your entire needs.
Here are a few:
>> LEARN ABOUT OTHER PERSONAL INSURANCE SOLUTIONS