Umbrella insurance basically refers to liability coverage over and above the stated primary and additional policies carried by an insurer. This insurance policy can be utilised to cover a wide range of risks and contingencies. Umbrella policies can be used to protect businesses, individuals, public and institutions from a wide range of risks. The umbrella insurance scheme is usually incorporated within the larger term life insurance scheme, which covers the policy holder’s dependents.
Umbrella policies offer a number of benefits and features. These include financial protection in the event of disability or death. They can also cover a wide range of other events and situations that may occur beyond the policyholder’s control. As well as financial benefits, umbrella insurance policies can also provide coverage in the event of loss or damage to the property of others.
An example would be if you owned a business and employed several people. One of them sustained a physical injury while operating the car, which resulted in him requiring hospitalization and medical treatment. While being treated, he was unable to work and had to pay all of the medical bills that resulted from his injuries. Under the terms of his insurance policy, he was left with massive medical bills that could have been covered under another type of insurance policy, such as an umbrella insurance plan.
An umbrella policy will typically contain provisions that will allow you to recover from claims resulting from the event that caused the insured individual to become unable to work. For instance, if the employer was at fault and sued the injured employee for medical expenses and damages, the umbrella policy would provide coverage. If the employer was not at fault but refused to take care of the injured employee, the umbrella policy would cover his legal costs. If the person sued for wrongful termination, discrimination, sexual harassment, physical abuse, etc., the umbrella policy would cover him from any monetary or emotional damages.
Umbrella policies will also provide you with liability protection should another person to file a claim against you. Suppose you accidentally caused a vehicle accident in another person’s vehicle while operating your vehicle. Even though you were operating the vehicle legally, if you caused a vehicular accident that caused injury or damage to another person’s vehicle, this can often times result in liability lawsuits. Your insurance coverage may not provide you with liability protection should another individual to file a claim against you.
If you operate your business out of your home, you may have assets located outside of the home that are subject to a claim. Umbrella policies can provide protection for these assets. What if, in the event that you incurred a negative balance due to unpaid debts, you incurred an equal amount of negative balances due to judgments? Well, under insurance that provides you with umbrella coverage, if you incurred a negative balance due to a judgment, you will not be required to file a separate claim against your assets, but your assets (which you cannot seize because they are not within the jurisdiction of the issuing company) will be protected and maintained, as long as you do not incur a negative balance due to an unpaid debt.
This type of insurance can also help cover the cost of legal representation in the event that you are sued, for example. Many people that own large amounts of collectible ornaments or other personal property choose to insure these valuables so that if they are sued they can maintain their ownership of these items without fear that they will lose their value. This type of protection is especially important for jewelry, paintings, antiques, and other collectable items that are valuable on the secondary market.
Umbrella policies are also great in case you are sued for slander or libel. For example, if you are sued for slander because you wrote something on a blog, this type of insurance will help pay for your legal fees. Many individuals have been successfully sued for things that were posted on blogs, and these expenses can often become quite large.