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Umbrella Insurance

Umbrella Insurance Explained

If you or your business were sued, would you have enough liability insurance to cover the costs? Umbrella insurance is one way to practically guarantee you’re protected.

What is Umbrella Insurance?

An umbrella policy provides additional liability coverage beyond a regular policy. It is purchased as an addition to auto, homeowners, boat or commercial insurance. This policy cannot be purchased as a standalone policy. You can buy it only after purchasing a regular policy with a specific amount of liability coverage.

Umbrella insurance provides liability for you, your family or your business. It helps you should you be found liable for damage to others or their property. In addition to coverage against lawsuits, it also helps with legal expenses. It provides compensation when you’re sued for an amount higher than what your original policy covers.

How it Works

You might be sued for $250, 000, but your regular policy offers $100,000 of liability. If your umbrella policy is $500, 000, then the first $100,000 will come from your regular policy. The remaining $150,000 will come from the umbrella policy. In addition to paying lawsuit-related expenses, coverage can also protect you if you’re sued for slander or libel. Anyone at risk for being sued can benefit from an umbrella policy.


An umbrella policy guarantees that if you are sued, then you won’t lose everything. The policy will help pay off anything regular liability coverage does not. These policies are relatively inexpensive, so just about anyone will find them affordable.