How an umbrella policy can protect you from the
No one ever plans to get sued, but accidents happen
and things go wrong all the time. In today’s litigious society, a slip, a crash
or even a careless comment may lead to a personal liability lawsuit, targeting
you for medical expenses, legal fees and damages. Most auto and homeowner’s policies include some personal liability
coverage; but the costs associated with a lawsuit can quickly exceed that
amount. When that happens, your home, savings and assets are fair game and
could be seized.
You can protect yourself against liability
lawsuits—and financial ruin—by adding umbrella insurance to your existing insurance
policy. Umbrella insurance is additional personal liability coverage that can
protect you and your assets if you are ever sued. It provides an extra layer of
protection, along with peace of mind.
umbrella insurance work?
Umbrella insurance, sometimes referred to as a
personal excess liability policy, is designed to protect you from major claims
and lawsuits. Umbrella insurance kicks in when you reach the limit on the
liability coverage in your homeowner’s, renter’s or auto policy. It covers you
if you are sued and need to pay legal fees, or if you are found liable and need
to pay damages of any kind.
Umbrella policies vary, but generally include:
- Bodily injury coverage, which provides coverage for claims or lawsuits
arising out of an injury that is determined to be your responsibility.
- Property damage coverage, which protects you if you are at fault for any
damage to another person’s property, including their home or vehicle.
- Medical payments for medical costs (ambulance, emergency room fees or
doctor visits) not covered by other insurance.
Because umbrella insurance goes into effect only after
underlying coverage is exhausted, you may be required to carry a certain amount
of underlying coverage before you can purchase additional umbrella coverage;
this could be as much as $250,000 liability coverage on your primary homeowner’s
You might consider umbrella insurance if you:
- Have a swimming pool. Each year, more than 500 Canadians
die from water-related incidents, according to the Canadian Red Cross. Children
four years and younger are among those most at risk, and most of these children
drown in swimming pools. Swimming pools present a serious liability risk, and your
homeowner’s insurance alone will likely not be enough to protect you in the
event of a lawsuit resulting from a drowning.
- Have snowmobiles or ATVs. ATVs, in particular, are associated
with a high risk of injury. Even if you let only family and friends ride your
vehicle, you are at risk of being sued if someone is injured or causes damage
to someone else’s property.
- Serve as voluntary board member. Even when doing good, you are at
risk for being sued. Volunteer board members can be held liable for the actions
(or inaction) of the not-for-profit organizations they serve. Your personal
insurance is typically not enough to shield you from executive risks. If you
join an organization that is unincorporated or are unsure about its level of
coverage, you may need to seek an additional policy. See HUB Professional
Liability white paper. See HUB Professional Liability white paper.
- Are a blogger or frequently write
Bloggers and online reviewers are increasingly being sued for defamation.
Unfortunately, homeowner’s and renter’s insurance does not cover libel (written
or published defamation) or slander (spoken defamation). If you blog or
frequently post comments or reviews, umbrella coverage can protect you should
your words cause offense.
- Are recently retired or living on a
You’ve worked hard and now may have a comfortable, but limited, amount of
resources. One major claim could deplete everything, and throw your retirement
and future into uncertainty.
How to buy
If you want to insulate
yourself from lawsuits and protect your home, savings and future, talk to your
HUB representative about purchasing
umbrella insurance. You can buy umbrella insurance ranging from $1 million to
$10 million (and beyond) for a modest monthly fee, which may be a small price
to pay for the rainy day security it can provide.