Umbrella Insurance

This refers to a liability insurance policy that protects the assests and future income of the policyholder above and beyond the standard limits on their primary policies. It is distinguished from excess insurance in that umbrella coverage is able to “drop down” to fill coverage gaps in underlying policies, while excess coverage goes into effect only when all underlying policies are totally exhausted. The term “umbrella” refers to how the policy shields the insured’s assets more broadly than primary coverage and is sold in increments of one million dollars.

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