UMBRELLA Insurance Policy
An accident resulting in serious injury or death can lead to civil action. If you cause a traffic accident, for example, your auto liability coverage may not be sufficient to cover all of the legal expenses. The same is true if you install a swimming pool in your backyard and a neighbor child drowns. What type of insurance would cover this type of liability?
An umbrella policy is designed to pay legal expenses that far exceed the limits set forth in a general liability insurance package. Most auto liability insurance policies will take care of most expenses pertaining to property damage and personal injury. But the court costs and subsequent civil actions may run into the hundreds of thousands of dollars.
The Major Benefits Of Umbrella Coverage
If you are sued for damages because of an accident you cause, your insurance policy will not cover these expenses. Your savings account, retirement funds, and even your paycheck from work could be at risk.
Homeowners can be at risk of losing their property in a lawsuit claim. Having an umbrella insurance policy is the best way to protect this valuable investment. The same is true for those who own other real estate, have a substantial retirement or investment portfolio, or are involved in large-scale buy-and-sell transactions.
This type of policy is usually written in increments of $500K-$1M, with policy limits as high as $10M. Depending on the actual construct of the policy, the insurance coverage would be honored in case of a civil suit involving injury, pain and suffering, or court costs associated with the action itself.
Insurance providers offer an extra layer of liability insurance for homeowners, for those who own their own business, and for individuals and companies regularly publishing material in print or on the Internet. Coverage to protect against slander, libel, and patented products are just a few of the types of umbrella insurance available.
Other Reasons To Purchase This Insurance
Suits can be filed for just about anything. This includes slander, defamation of character, and copyright infringement. The use of copyrighted music, for example, can result in a suit of hundreds of thousands of dollars. You would have to pay for your defense attorney as well as for any settlement decided upon by the court.
In some states, the equity in your real estate holdings can be used to pay a settlement. You would have to sell your home of other property in order to pay these legal costs unless you are covered by umbrella insurance.