Glossary

What is Umbrella Policy?

An insurance policy that provides additional liability coverage beyond the limits of underlying policies such as auto, homeowners, or commercial general liability.

Full Definition

An umbrella policy provides an extra layer of liability protection above and beyond the limits of the insured's underlying policies (homeowners, auto, watercraft, etc.). Unlike excess liability policies that follow the exact terms of the underlying policy, umbrella policies may also provide broader coverage — dropping down to cover claims that are excluded by underlying policies, subject to a self-insured retention. For UHNW individuals, personal umbrella limits of $5M-$50M are common to protect against catastrophic liability claims.

Related Terms

Excess Liability

Aggregate Limit

Self-Insured Retention (SIR)

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Related Coverage & Services

Umbrella / Excess Liability Insurance

Umbrella and excess liability policies provide additional limits above primary general liability, auto, and employers' liability.

Excess Liability

Additional liability coverage that sits above primary policies and follows the same terms and conditions as the underlying policy.

Aggregate Limit

The maximum total amount an insurance policy will pay for all covered claims during the policy period.

Self-Insured Retention (SIR)

The amount of loss the insured must pay before the insurance policy begins to respond, similar to but legally distinct from a deductible.

Personal Insurance

Private Client

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