Primary liability limits can be exhausted by a single serious claim. Umbrella insurance sits above underlying auto, homeowners, or commercial liability policies and provides additional limits once those policies are used up. It may also cover some gaps that the underlying policies exclude.

Coverage is typically written on an occurrence basis with a single aggregate for the policy period. The insured must maintain specified minimum underlying limits. When a covered claim exceeds those limits, the umbrella responds. Defense costs may be inside or outside the umbrella limit depending on the form.

Personal umbrellas are popular with households that have significant assets to protect. Commercial umbrellas protect businesses against large liability verdicts. Pricing reflects the underlying exposures and the higher limits requested. The extra layer provides sleep-at-night capacity that primary policies alone cannot supply.

• Excess liability coverage above primary policies
• Requires maintenance of underlying limits
• May broaden coverage slightly beyond underlying forms
• Protects assets against severe liability claims