What Are the Benefits of an Umbrella Insurance Policy?
There are several benefits to purchasing umbrella liability insurance for individuals and companies. These plans provide financial assistance when claim amounts overrun coverage limits of other policies that are in force. Other benefits from umbrella liability policies consists of covering legal aid costs, and actions of the pets owned by policy owners that causes damage to others.
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Benefits
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The extra coverage that umbrella liability plans provide gives individuals and businesses the peace of mind knowing that excessive award amounts would be taken care of by their insurance companies. These policies pay award amounts up to the plans' coverage limits. For example, if claim is made against the insured for $2 million and their insurance policy only has $1.5 million in liability, umbrella liability plans would cover the remaining $500,000. Both types of umbrella liability plans also pay for the policy owners' legal fees if they have to go to court to fight claims.
Types
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Both businesses and individuals are able to obtain different types of umbrella liability policies that fit their needs. Individuals typically purchase these plans to blanket other coverages, such as homeowners, renters and auto insurance. For companies, umbrella liability insurance cover general liability and employer's liability. However, businesses are not covered under these plans if they give judgments, advice and recommendations that injures third parties. These risks have to be covered by professional liability or Errors and Omissions plans, known as E&O plans, which are bought separately.
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Coverage
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Umbrella liability insurance plans cover perils that can happen at any time. Business and personal umbrella liability plans both cover claims of property damage and bodily injury. Companies are also covered when causing advertising injury. Individuals who are serving on charity and civic organization boards are given coverage too. Personal umbrella liability plans provide coverage for the actions of the policy owners' family members who are living in their homes and along with their pets.
Reasonable Costs
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Umbrella liability insurance policies are easy on the policy owners' pockets. These plans are fairly inexpensive for the amounts of liability the plans provide. This is because other policies' coverage amounts have to be exhausted before these plans pay. For example, individual umbrella liability plans can cost $150 to $300 per year as of December 2010. If policy owners want to add $1 million in coverage, it will cost them an extra $75 annually and around $50 for each million on top of that.
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