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Umbrella Liability Policy

Should I Purchase an Umbrella Liability Policy?

Many people feel that once they have their primary insurance, they’re all set. Without an umbrella liability policy in place, however, your clients are running a huge risk. Primary insurance is the minimum protection.

Your clients might not appreciate that umbrella liability insurance takes over where other insurance ends. If your clients think they have their insurance requirements all sorted out, it’s important to let them know that they may need more. This is especially the case if they are exposed to higher levels of risk than your average customer.

As an insurance producer, it’s your job to explain to your clients why they should purchase an umbrella liability policy. Prime Insurance Company is here to help.

The Best Reasons for an Umbrella Liability Policy

This coverage is called an umbrella liability policy because it protects your clients the way an umbrella protects people from the rain. Umbrella liability coverage can be useful for anyone, including, but by no means limited to, homeowners, vehicle operators, and businesses.

Personal umbrella coverage and commercial umbrella coverage are similar, but each handles a different aspect of risk. Either way, the principle remains the same. When standard primary insurance isn’t enough, umbrella coverage aims to fill the gaps.

If your client is engaged in business or activities of a riskier nature than most, umbrella liability insurance can help defend against lawsuits that could otherwise lead to financial ruin. The potential of lawsuits is part of doing business. The awards are often more than primary insurance can handle. Where there is potential for catastrophe, injury, or other significant issues, your clients can benefit from an umbrella liability policy. This can not only handle the cost of a financial award but also pay for legal defense and additional expenses, such as medical bills and lost earnings.

The point of umbrella liability insurance is to extend primary insurance coverage. If your client’s current insurance includes many exclusions, you can show them that umbrella coverage is an excellent idea. Otherwise, they are essentially uninsured if they are undertaking activities that their primary insurance does not cover. Take a look at the primary insurance exclusions and find out what exactly is missing.

It’s also wise to point out the difference between umbrella coverage and excess policies. If your client tells you they have excess coverage, dig deeper. An umbrella liability policy should be broader in what it covers. It’s not just the primary insurance but bigger. Its goal is not only to extend what primary insurance will cover but also to provide primary coverage in areas where your clients would otherwise be exposed.

Underlying all this is one big reason to have an umbrella liability policy: it protects your client from greater risk. But what about situations in which a client believes the expense of an umbrella liability policy seems too high, even considering the cost of risk? Read on for the statistics that will show your clients just how valuable an umbrella liability policy is.

Why an Umbrella Liability Policy is Worth Every Cent

If your clients don’t have an umbrella liability policy, they aren’t alone. According to an ACE Private Risk Services study, people often underestimate the potential cost of a liability lawsuit. As a result, they may skip an umbrella liability policy, thinking that the risk of a lawsuit that goes beyond their general liability insurance is not worth the added expense.

In the survey that informs the report, more than half of the respondents believed the highest amount of damages they would be responsible for after a serious injury caused by an accident involving their vehicle or on their property is less than $5 million. The report points to much higher costs, however, including:

  • A $49 million verdict from a multi-vehicle crash that left a 21-year-old college student comatose for a month and in need of lifetime 24-hour care;
  • A $31 million verdict for two defendants swept off a boat and injured by its propellers;
  • A $29 million verdict for a child who suffered a major spinal cord injury as a passenger in a vehicle involved in a head-on collision;
  • more verdicts amounting to $21 million, $20 million, $19 million, and $14 million, all stemming from auto or ATV accidents.

With those verdicts in mind, anyone may find it shocking that 21% of the survey respondents did not have an umbrella liability policy. Of the 79% that did have an umbrella liability policy, more than 40% had less than $5 million in umbrella liability coverage. Clearly, $5 million isn’t enough. $0 in umbrella coverage is worse! Show your clients verdicts like these and they should quickly understand that umbrella coverage is critical to protecting their assets.

Getting an Umbrella Liability Policy Quote

For your clients’ best interests, it’s crucial to secure umbrella liability coverage that meets their needs. The limit needs to be high enough to protect from devastating lawsuits. It cannot contain exclusions that work against your client’s reasons for buying extra coverage.

Prime Insurance Company is in the business of matching insurance coverage with producers and their clients. We work hard to keep everyone happy with their coverage and fully protected according to their activities. You can rely on us to offer a true umbrella policy. This gives you a competitive edge against other producers who are not urging their clients to get the best umbrella insurance possible.

Write more business today with Prime Insurance Company. To learn more or to get a quote, contact us toll-free at 800-257-5590, email us at info@primeis.com, or fill out an online application. To stay up to date with Prime, you can find us on social media, too. Connect with us today on Facebook, LinkedIn, YouTube, and Instagram for more information and news about Prime.


rick lindseyAuthored by Rick J. Lindsey, CEO, President, and Chairman of Prime Insurance Company

Rick J. Lindsey hails from Salt Lake City, Utah. He began working in the mailroom of his father’s Salt Lake City insurance firm, getting his introduction to the business that became his lifelong career. Lindsey quickly rose through the ranks while working in nearly every imaginable insurance industry job. As an entrepreneur, specialty lines underwriter, claims specialist, risk manager, and a licensed surplus lines broker, Rick Lindsey is highly skilled in all levels of leadership and execution. As he progressed on his career path, Rick discovered an urgent need for insurers willing to write policies for high-risk individuals and businesses. He was frequently frustrated that he could not provide the liability protection these entities desperately needed to safeguard their assets. He also formed the belief that insurance companies acted too quickly to settle frivolous claims. Lindsey decided to try a different approach. He started an insurance company and became the newly formed entity’s CEO. This opportunity has enabled Rick to fill a void in the market and provide a valuable service to businesses, individuals, and insurance agents who write high-risk business. Prime Insurance also specializes in helping individuals and businesses who live a lifestyle or participate in activities that make them difficult for traditional carriers to insure. If you’ve been denied, non-renewed, or canceled coverage, don’t give up quite yet. Chances are Prime Insurance can help.

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