Umbrella!

Umbrella Insurance Basics

Here's an excellent article, entitled "Protect your family from lawsuits even if you aren't rich" in USAToday. It has statistics and information that are valuable to the discussion on Personal Umbrella Policies.

Most of us think that a personal umbrella insurance policy is excessive - and there's no need for it. But when we look at our liability and lawsuits, the total expenses add up pretty quickly. If you are concerned about protecting your income or future income, your assets, or your future inheritance, you ought to be consider an umbrella policy.

It is my recommendation that everyone consider an umbrella policy because it inexpensively adds significant coverage – and it will cover some things that would otherwise not be covered in the underlying policy.

Six sample Scenarios...

Tom's 22-year-old son repairs neighborhood bicycles from the garage during the summers. Both the premises liability risk and the completed operations/products liability risk are probably uninsured. Homeowners policies exclude business-related lawsuits.

Bill works occasionally from home (telecommutes). His homeowners policy excludes injuries to those who come on the premises for business purposes. (Like a courier or UPS delivery person who falls on Bill's icy driveway while delivering a business package.)

Joe is 80 years old. He has no car and no longer drives, but he occasionally needs to be driven by others to doctor appointments, shopping, etc. Under principal/agency statutes and caselaw, Joe can be sued if his driver causes an accident, but Joe has no personal auto insurance policy and therefore no coverage.

You have a company-furnished vehicle and no other personal automobile. Your employer has broad form DIC coverage for her use of nonowned vehicles. But the business auto policy contains the usual exclusion for injuries your client causes to coworkers riding with her (i.e., the fellow-employee exclusion).

You own a tractor and often plows the driveway or cut the lawn of an elderly neighbor. (The homeowners policies often exclude use of service vehicle if ever used off the resident's premises).

80-year-old Charlie needs some help getting dressed and eating. So his family helps him hire a part-time care provider to come into his home. He buys a small workers comp policy which includes employer's liability coverage, but he's not sure the policy has sufficient coverage.

You decide to rent [auto/boat/snowmobile/ATV] while you are vacationing outside the US. You want to be sure you have sufficient coverage in case you hurt someone or damage something.

You choose to rent a cabin for a wedding reception. You want to be sure there is coverage in case one of your guests gets injured.

The Results

In all above scenarios, since most homeowners or auto policies do not cover these items, you can be sure you have coverage with the right Umbrella policy. 

~ Jon