The term umbrella liability insurance refers to a type of liability insurance policy that can be purchased by organizations, businesses and individuals and will cover them against claims over and above amounts that are normally covered by regular policies. It is also used to cover claims that are not currently covered. The benefit of this particular insurance is to provide assistance to policy holders when they are faced with catastrophic events that risk ruining them financially especially in business. This kind of policy is popular for business, home and auto coverage.
Basically, umbrella liability insurance coverage is not taken out as an insurance policy on its own but is usually an insurance coverage that acts as a protective insurance on top of already existing insurance cover. It will help take care of the extra losses that may still exist after original insurance covers the damage to the limit. As an example, if a home has an insurance policy of $500,000 and then damages occur to the tune of $700,000, then the original home insurance cover will pay for damages to the tune of $500,000. The difference, which is $200,000, will then be covered by the umbrella liability insurance cover.
One of the reasons why people need to get this insurance is that it is not limited to one particular policy type but does cover the entire spectrum. For example, a person or business can chose to have umbrella liability insurance coverage on top of a home insurance policy or car insurance policy or even a business insurance cover. Another reason is that this insurance cover is very cheap and quite affordable. This reason regarding the low cost of this cover makes it an attractive addition to the original cover. For example, a cover of about $1 million will only cost about $300 annually. It is therefore in a customer’s best insurance to take out this cover as for a few hundred dollars annually, they get cover worth hundreds of thousands of dollars.
Many experts in the insurance industry agree that spending the little extra amount on umbrella liability insurance coverage is worth the benefit of the extra coverage. This extra coverage will kick-in where the original cover comes to an end. Some advice consultations with finance professionals and insurance advisers in some cases. However, whichever decision is arrived at, it is always worthwhile to have umbrella liability insurance as this policy is affordable and can come in very handy.