Do you need umbrella insurance? Picture this: you are in an accident that is not your fault and you are now liable for damages done to the other person’s vehicle and maybe even injuries or death. Are you covered for this?

Here is another scenario. You are a landlord for a building where someone was injured and now they are suing you. Are you covered for this?

In a nutshell, you need umbrella insurance.

What is umbrella insurance?

Umbrella insurance is extra liability insurance that is intended to protect you from any major claims and lawsuits over and above what is specified in your normal policies. It is there to protect you from the above, or similar, situations that may occur.

What exactly will you be covered for?

With an umbrella insurance policy, you are provided with an additional layer of security against:

  • Being sued for damages to other people’s property or injuries caused to others in an accident
  • Defamation of character, vandalism, slander and invasion of privacy

There are things that it won’t cover for so as always make sure you read the fine print before signing.

Is there more than one type of umbrella insurance?

Umbrella insurance can be divided into personal policies and commercial policies.

  1. Personal umbrella policy: an extra layer of cover, over and above homeowner and vehicle insurance.
  2. Commercial umbrella policy:  an extra layer of cover, over and above vehicle insurance, general business insurance and building insurance.