Some insurance includes liability coverage. But if you’re worried your liability isn’t sufficient, then you can consider umbrella insurance. It’s extra liability coverage that provides additional protection beyond what is provided by your other policies. This usually applies to coverage for auto, home or business. You might hear this coverage referred to as excess liability insurance. You can’t get this coverage unless you already have liability elsewhere. That is because it works in conjunction with your existing policies.
Imagine that you cause an accident that causes $600,000 worth of damage. Since you’re at fault, you’re responsible for that money. If your liability limit is $200,000, then you have to pay the remaining $400,000 from your own assets. This puts your assets and belongings at risk, if you don’t have the money. But with umbrella insurance, your policy would cover the remaining $400,000, providing you have enough coverage.
If you’re a business owner, then you can purchase a commercial umbrella policy. This is often recommended for business owners because commercial umbrella coverage provides higher limits. Businesses are often sued for a variety of reasons, so it doesn’t hurt to have the extra protection.
Speak with an insurance agent to determine how much umbrella insurance you need. It is available in increments, usually up to a million dollars or more.