What is Umbrella Liability Insurance?
Umbrella liability insurance is a type of insurance coverage that goes above and beyond what is considered the usual and standard coverage for liability. Often selected as an option by corporations, umbrella liability insurance provides a level of protection that can come in very handy in extreme situations that would impede the ability of the company to continue operations. As with many forms of insurance coverage, umbrella liability insurance coverage will often include some type of deductible that must be met, as well as some amount of self-insured retention. As far as the actual function of umbrella liability insurance, the coverage will follow the same basic procedures associated with most types of liability insurance. In order to receive some sort of compensation from the coverage, the insured party will need to submit an insurance claim. Insurance claims are received, and evaluated to determine if the contents of the claim are in compliance with the terms of the policy. If the i
Simply put, it is a type of insurance that is used when everything else has been exhausted. “Everything else” includes your existing insurance policies because they have a limit as to how much you can expect to be compensated for. This is especially important for small businesses; any loss beyond what can be compensated for by existing policies may prove to be crippling to the company. Here is one good example of where umbrella liability insurance comes into play. Let’s say you are running a small restaurant and one of your customers complain that one of your employees has accidentally spilled water on his cell phone and damaged it. As an employer, you are held liable for the actions of your people and is required to pay compensations to the customer for the damage to his mobile phone. However, you’d still go to court and defend yourself. You spend a lot of money, much more than what you are covered for in your insurance policies, and at the end you are judged guilty. By this time, you
