Inland marine insurance closes the gaps in standard business property insurance. Property insurance protects your tangible assets stored at your main business site and up to about 1,000 feet away. It doesn't protect property that is stored beyond that distance or property that is in transit between business sites. Show
Inland marine insurance covers losses to five types of business property:
Inland marine insurance does not cover:
Nobody’s perfect. That’s why you buy liability insurance: You can avoid financial ruin if you accidentally cause major injuries or property damage to others. Problem is, your insurance isn’t perfect, either. That’s where a personal umbrella insurance policy comes in. What is umbrella insurance?Think of umbrella insurance — sometimes called personal liability insurance — as a fail-safe for your savings and other assets. If you’re sued for damages that are above the liability limits of your car insurance, homeowners insurance or other policies, an umbrella policy helps pay what you owe. Umbrella insurance provides extra liability coverage beyond the limits on your existing auto, homeowners or other policies. It pays out if you're at fault for injuries or damage and your other policies aren't sufficient to cover the costs. Note that umbrella insurance is similar but not identical to excess liability insurance, which gives you higher limits on the liability coverage you already have. What’s the difference? Most umbrella insurance also provides extra coverage that’s not included in your base insurance policies. For example, it may pay for legal fees and damages if you’re accused of slander (a false spoken statement) or libel (a false written statement). How umbrella insurance worksTo get a better sense of how umbrella liability insurance can come in handy, imagine this scenario: You run a red light and T-bone another car. There is significant damage to the vehicle, and several people are injured. The car needs $25,000 in repairs, and treatment of the injuries totals $275,000. Plus, the driver of the other car is an orthodontist who won’t be able to work for months due to a broken arm. He sues you for $200,000 in lost earnings. You’re on the hook for a total of $500,000. If you carry only $300,000 liability coverage with your car insurance, the remaining $200,000 will have to come out of your pocket. If you had umbrella insurance, it would pay the difference between what your primary insurance covers and what you still owe. An umbrella policy would also cover your legal costs in the lawsuit. What does umbrella insurance cover?Umbrella insurance covers you and members of your household against lawsuits involving personal injury to others, damage to other people’s property, and a variety of claims such as defamation, landlord liability and false imprisonment, depending on your policy. In addition to paying damages up to your liability limit, your umbrella insurance will typically also cover associated legal costs beyond that amount. Say you have an umbrella policy with $1 million of liability coverage, and you’re sued for that full amount. Your insurer would pay out the $1 million plus provide your legal defense or cover your fees. You might have to pay a "retained limit," which is similar to a deductible. It’s an amount you’ll have to cover before your policy begins to pay out. Details and exclusions can vary significantly between umbrella policies, but here are a few sample scenarios that would generally be covered:
What umbrella insurance doesn’t coverUmbrella insurance doesn’t cover your own injuries or property damage — you’ll need other types of coverage for that (such as health insurance or collision coverage on your auto insurance). Nor will it cover liability associated with your business unless you have a commercial umbrella policy rather than a personal one. Most umbrella insurance policies won’t cover liability stemming from the breach of a contract you’ve entered into. For example, if a roofing company sues you because you haven’t paid for the work it’s done under the contract you signed, your umbrella insurance policy is unlikely to help. And if you hurt someone deliberately or commit a crime, you’re almost certainly not covered. Boats are another common area of exclusions. Some companies cover certain sizes or types of watercraft only. Others don’t cover them at all unless you have an existing boat insurance policy. Umbrella insurance usually covers Umbrella insurance usually doesn't cover
Do you need an umbrella insurance policy?There’s no law requiring you to buy umbrella insurance. But if you have a lot of assets or a high chance of being sued, you might want an umbrella policy. It might be worth buying umbrella insurance coverage if you:
Provides extra liability coverage and legal defense costs once the limits of your auto, home or other underlying policies (such as boat or motorcycle) have been exhausted. You must already carry auto or property insurance, usually homeowners, to qualify. Covers incidents that your main insurance might not, such as libel and slander. You may need to have the umbrella policy and all underlying insurance with the same company. This reduces your ability to shop around for better rates on individual policies. Coverage is relatively inexpensive for limits starting at $1 million. Your total premium costs may go up if you need to add extra liability coverage to your existing policies. (You typically need a minimum amount of liability insurance on underlying policies in order to add umbrella coverage.) Coverage often applies anywhere in the world. May cover certain rental items for which you don't have insurance, such as a boat. How much umbrella insurance do you need?It’s wise to have at least enough liability insurance to cover your assets. To decide how much umbrella insurance coverage you need, add up the value of your property, savings and investment accounts. Then, take a look at the liability insurance you already have through your existing policies and buy enough umbrella insurance to make up the difference. You may also want to include potential income if you’re likely to earn much more in the future than you do now — if you’re a medical student, for example. When considering potential lawsuits, keep in mind that employer-sponsored retirement accounts such as 401(k)s are protected from most lawsuits under the federal Employee Retirement Income Security Act of 1974[0]. IRAs aren't, except for funds rolled over from an employer-sponsored account. However, state laws may partially protect your IRA accounts and the equity you have in your home. Check your local laws before deciding how much umbrella insurance you need. Insurers typically sell umbrella insurance in million-dollar increments. This means the cheapest policy available provides $1 million in coverage, the next-cheapest policy offers $2 million in coverage, and so on — so you get a decent amount no matter what you choose. How much does umbrella insurance cost?The cost of an umbrella policy could be as low as $200 per year, with an average cost of about $380 for $1 million of coverage, according to Trusted Choice[0], a network of independent insurance agents. With its high coverage limit, umbrella insurance generally offers good value for the cost. However, you may also end up paying more for your other insurance policies if you need to increase your liability coverage to meet the minimum limits required for umbrella insurance. How to buy umbrella insuranceAlmost all major insurers offer umbrella insurance. Most require that you carry your auto, homeowners, condo or renters insurance with them, too. You generally must buy a minimum amount of liability insurance on those policies before you can buy an umbrella policy. For instance, to add umbrella coverage to your car insurance, your policy may need to have $300,000 of bodily injury liability coverage and $100,000 of property damage liability coverage. To add umbrella coverage to a homeowners policy, you often need $300,000 of liability insurance. RLI and Auto-Owners Insurance are two companies that offer stand-alone umbrella insurance policies, meaning you could carry your auto or homeowners coverage with someone else. (Availability may vary by state.) An independent agent or broker can help you find options from these companies or others. Another factor to look at when shopping is the maximum limit a company offers. Most umbrella policies stop at $5 million, but some go higher. Liberty Mutual and Farmers, for instance, offer umbrella insurance up to $10 million, while Chubb’s umbrella limits go up to $100 million. Remember that the best umbrella insurance for you will cover your hobbies and other activities. For example, if your idea of a fun vacation is renting a Jet Ski and hitting the water, know that some umbrella insurers won’t cover these watercraft. Below is a sampling of umbrella insurance offerings from major carriers. Coverage limits: $1 million to $5 million. States available: Washington, D.C., and all states except Alaska and Massachusetts. Eligibility requirements: You must have underlying policies with at least the following limits:
Coverage limits: $1 million to $5 million. States available: Washington, D.C., and all states except Hawaii. Eligibility requirements: Requirements vary by state. Generally, your underlying policies must meet the following minimums:
Coverage limits: $1 million to $100 million. States available: All 50 states and Washington, D.C. Eligibility requirements: Minimum limits for underlying policies vary by state. Coverage limits: $1 million to $10 million, except in Florida and California, where the maximum limit is $5 million. States available: All states except Alaska, Delaware, Hawaii, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, North Carolina, Rhode Island, Vermont, Washington, D.C., and West Virginia. Eligibility requirements: If you own a car, Farmers must insure it with bodily injury liability limits of at least $250,000 per person and $500,000 per accident. You can insure your home with any company as long as it has at least $300,000 of liability coverage. However, if you don’t own a car, Farmers must insure your home. Coverage limits: $1 million to $10 million. States available: All 50 states and Washington, D.C. Eligibility requirements: You generally must have a Liberty Mutual auto policy with at least the limits below, but requirements may vary by state. The other policy types are optional, but if you have any of them, the liability limit must be at least $100,000.
Homeowners, dwelling, watercraft, farmer's personal liability or general personal liability
Coverage limits: $1 million to $5 million. States available: Washington, D.C., and all states except Alaska, Hawaii, Louisiana, Massachusetts and Oklahoma. Eligibility requirements: It depends on where you live. In most cases, all vehicles and your primary home must have Nationwide policies with at least the following limits:
Coverage limits: Policies start at $1 million. There’s no set maximum limit; coverage is evaluated on an individual basis. States available: All 50 states and Washington, D.C. Eligibility requirements: Minimum liability limits for underlying policies vary by state. Coverage limits: $1 million to $5 million, with higher limits available through the USAA Insurance Agency. States available: All 50 states and Washington, D.C. Eligibility requirements: The following limits apply to underlying policies: Homeowners, renters or rental property
Watercraft (if applicable)
Frequently asked questions Is umbrella insurance worth it? The more you have to lose in a lawsuit, the more umbrella insurance might be worth to you. Those with more assets or greater potential earnings tend to benefit most from an umbrella policy. You may also want to consider umbrella insurance if your lifestyle puts you at increased risk of injuring others and being sued (for example, you have a swimming pool or go hunting regularly). Does umbrella insurance cover property damage? Umbrella insurance generally covers you if you’re responsible for damaging other people’s property, but it won’t pay out for damage to your own belongings. Say you get into an accident and cause more damage to other vehicles than your auto liability coverage will pay. Your umbrella policy would make up that difference — but it wouldn’t pay for repairs to your own car. Does umbrella insurance cover dog bites? If your dog bites someone, you’d turn first to your homeowners, renters or condo insurance policy to cover any legal expenses and damages. However, your umbrella policy could provide extra coverage if the costs go above the liability limit on that policy. Keep in mind that some insurers won't cover certain dog breeds and sizes. For more, see NerdWallet’s story about dog bites and homeowners insurance. What are the best umbrella insurance companies? Because so many insurers require you to have underlying policies such as auto or homeowners in order to buy an umbrella policy, consider researching the best car insurance companies or the best homeowners insurance companies and then asking about your chosen company’s umbrella options. If you need particularly high amounts of coverage, try Chubb, which offers umbrella limits up to $100 million. What is an umbrella policy quizlet?sometimes called catastrophe insurance, an umbrella policy provides excess coverage over the underlying or primary liability policy.
What is a primary difference between umbrella and excess liability policies quizlet?Excess coverage is no broader than the underlying insurance. Umbrella coverage is broader than underlying coverage. List two reasons why, in actual practice, the distinction between excess and umbrella liability coverage is often unclear.
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