10 Things to Know About Personal & Commercial Umbrella

1. A personal umbrella provides an additional layer of liability coverage above and beyond the liability limit in auto and homeowner policies. Coverage starts at $1 million and goes up from there. —Bill Gatewood, corporate vice president and director of personal insurance at Burns & Wilcox
2. The personal umbrella policy is extremely undersold. The vast majority of people with personal lines exposures don’t have an umbrella policy but they should, as it is one of the most inexpensive coverages available. An umbrella policy with $1 million of liability coverage can be had for around $200 dollars or less per year. —Bill Gatewood, Burns & Wilcox
3. Most personal umbrella policies include an expert legal team on retainer and pay for legal defense at their own expense outside of policy limits to defend the insured and negotiate a fair settlement. —Daina Kawchack Smith, chief marketing officer for PersonalUmbrella.com Insurance Services Inc.
4. An insured doesn’t need to be a millionaire to have a $1 million personal umbrella policy. They don’t need to own a home, be married, have kids or be a certain age to have one. If the insured drives a car, crosses a street or has people over to their home (either rented or owned), they need this coverage. Even if someone is trespassing on your property, you could be liable for any injuries. —Daina Kawchack Smith, PersonalUmbrella.com
5. Personal umbrella is not something people buy; it’s something they have to be sold. Most customers are not going to ask for an umbrella, an agent has to proactively educate the customer and let them know what it is. In cases where customers are educated about what an umbrella does, how it can protect them and how inexpensive it is, the close rate is probably somewhere in the 70 percent range. —Bill Gatewood, Burns & Wilcox
6. Personal umbrellas can be sold as a monoline policy. While umbrellas are often tied to auto and home policies, there are companies that offer standalone umbrellas at very reasonable prices. If an insured’s auto is with one carrier and their home is with another that doesn’t disqualify them from purchasing a personal umbrella. —Bill Gatewood, Burns & Wilcox
7. A commercial umbrella policy provides additional liability limits over and above the primary limits in commercial general liability, commercial auto and employment liability policies. In some cases it may schedule over a professional liability policy. —Chris Longo, CEO, McGowan Excess and Casualty and professor, Insurance Journal’s Academy of Insurance
8. There is no contract standardization in commercial umbrella policies, most carriers have their own. Three commonly used contracts for umbrellas are the ISO umbrella policy, the A/B umbrella policy and the excess “follow form” policy, which is not strictly an umbrella policy but is nevertheless commonly available. The “follow form” policy provides additional liability coverage but is not as broad as the ISO or A/B policies. —Chris Longo, McGowan Excess and Casualty, IJ Academy of Insurance
9. Commercial umbrellas offer a per occurrence limit, as well as a policy aggregate, and include a self-insured retention (SIR). —Chris Longo, McGowan Excess and Casualty, IJ Academy of Insurance
10. One key issue with a commercial umbrella is whether it provides defense costs inside or outside the policy limits. In cases of large and severe claims, it is important to have defense outside the policy limits so that policy limits are preserved to pay for the claim. —Chris Longo, McGowan Excess and Casualty, IJ Academy of Insurance