Accidents Happen: Be Sure You Have An Umbrella

By: Denise Koslowsky

Accidents happen.  That’s why it make sense to do all you can to protect yourself and your family.  Unfortunately the more you have acquired in life, the more you need to think about how your financial security could be impacted when something goes wrong and you get sued. Excess Liability Insurance, or a Personal Umbrella Policy as it is sometimes called, is a critical but often overlooked part of your insurance portfolio and it can help you to protect your assets.

Why do you need a Personal Umbrella policy of your very own?  Just imagine:

  • You’re involved in a serious car accident with fatalities – and it is your fault.
  • Your teenager goes to a party, gets into a fight and breaks someone’s jaw.
  • You slip on ice while walking to your car in a parking lot.  The fall makes you lose control of your shopping cart.  The cart catapults into a 5 way intersection and causes a four car accident. One of the cars goes through a storefront.
  • You discard an unused needle in your garbage.  The person collecting the garbage gets stuck by the needle.
  • You invite friends over. During lunch one of their children goes outside unnoticed and falls into the pool causing a serious injury.

In each of these examples, a personal umbrella policy would be there to help provide additional coverage.

What is a Personal Umbrella policy?

Excess Liability Insurance is an additional level of coverage added to your portfolio to help protect your personal assets from major claims and lawsuits.  Excess Liability kicks in when the liability limits of your other policies (meaning your primary homeowners, automobile, or watercraft policy) have been exhausted.

What does a Personal Umbrella policy cover?

Your excess liability policy will offer coverage against claims and lawsuits that happen at home as well as at locations off your property, and often worldwide coverage is included.  It will protect you against claims including:

  • Bodily injury
  • Personal injury
  • Libel
  • Slander
  • Defamation of character

In addition to the claims listed above you may be able to add additional excess liability coverage options including: uninsured/underinsured motorist coverage; employment practices liability coverage (EPLI), directors & officers liability (D&O) insurance for those that serve on not-for-profit boards.

How much coverage do I need?

It makes sense to purchase an umbrella policy that is equal to at least as much as your total net worth, but keep in mind the more successful you are the higher your liability risks will be.  You don’t want to be faced with a lawsuit only to find out that the coverage you have is insufficient.  Excess liability coverage is usually sold in increments of $1 million.  Some carriers may place limits on the amount of coverage you can purchase, however we work with elite carriers that specialize in high-net-worth insurance and offer coverage up to $50 million.  Coverage is underwritten based on your driving record and claims history.

If your net-worth is over $5 million you could be extremely vulnerable.  Certainly you would not ever want to be in a situation where you needed to declare bankruptcy because your insurance coverage fell short.

Final Thoughts from Advocate Brokerage

Every family is unique. The activities in which you participate, the lifestyle you live is different, and presents risks that are individualized.  Building a relationship with your insurance agent helps them to understand your needs and risk factors.  Together we can work to build an insurance portfolio designed for the way you live!

If you don’t already have an Umbrella Policy in place, you will need to be sure you have a homeowner’s policy and an auto insurance policy with the minimum amount of liability coverage in place.  If your homeowners policy and auto insurance policy are not with the same carrier, the insurance specialists at Advocate Brokerage will work with you to find the Excess Liability Policy that is best for your individual needs.

Finally, think of a Personal Umbrella as your Sleep Better At Night policy….after something has gone wrong!  If you are unsure if your current coverage is sufficient, we encourage you to get in touch with us.  An excess liability policy will go the extra mile to keep your world, protected.

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