Personal and Personal Farm Umbrellas: Who Needs an Umbrella Policy?

In today’s litigious environment umbrella coverage is becoming a clear need for a broad audience.  The old paradigm on umbrella coverage was “only the wealthy” needed it. Jury Verdict Research says 13% of personal injury liability awards and settlements hit the million dollar mark or higher. While this is still a relatively small percentage, think of that in terms of your agency clients: one in ten will need an umbrella. And there is no way to tell which one will need it. Offering clients an umbrella policy is a smart move for an agent.  You provide valuable protection that is very affordable for the limit of coverage granted. The more policies a customer has with your agency, the more likely they are to stay with your agency, and you mitigate your E&O exposure.

Our policies start by offering $1,000,000 of coverage and limits go as high as $5,000,000.  A million dollar limit sounds like a large number, but a million does not go as far as it used to.

Imagine the following scenarios where an umbrella policy helps your client:

• Driving to work early in the morning, your insured is following a school bus full of children. Your insured drops a coffee mug and spills hot coffee on his leg. Instinctively, he looks down at his burned leg, unfortunately, at the same moment the school bus slows down to make a turn. The crash injures several of the students, and your client is found liable for long-term injuries.
• Your client’s neighbor sends their child over to play on a daily basis. Your client has a pool. After a session of swimming, everyone goes back into the house and the sliding door is shut, cutting off access to the patio around the pool. The neighbor’s child, however, can climb a nearby chair, allowing her to open the door wide enough to scoot through and resume swimming in the pool, now unsupervised. The neighbor’s child goes out too far and drowns, and your client is found to have negligently supervised.
• Your client is farming and needs to cross from one field to another in their combine and is in a hurry because bad weather is predicted to be on the way. Unfortunately, it’s just after dusk and an SUV coming down the road can’t avoid the combine. Your client is found at-fault for driving the combine onto the road and causing the death of the driver of the SUV.

These situations are real examples of times an umbrella policy has been triggered to pay for liability coverage. Could any of those be predicted ahead of time? All begin innocently enough, but circumstance can spiral and cause severe results that most underlying coverage is not equipped to handle. We don’t know who will need an umbrella, so it’s a good habit to offer it, and document that it’s been offered.