What Exactly Is Personal Umbrella Coverage?
A personal umbrella policy provides additional coverage when a client's base liability coverage is exhausted. It covers legal fees and loss of income associated with liability claims – even for incidents that occur outside of Canada.
Coverage that protects property is an easy concept to buy into. It's straightforward to understand and is often mandatory. The need becomes less clear when it comes to coverage that protects against legal action.
Most people associate liability with businesses or high-income earners. The reality is that most of us are targets for legal recourse, even when going about our regular, low-risk lives. Pet owners, social media users, people who do volunteer work — wealthy or not — these people are all vulnerable.
Trends suggest that Canadians are becoming more litigious, and court cases are resulting in larger payouts. And while lawsuits don't directly result in the loss of the "things and stuff" protected by standard personal insurance policies, people could indirectly lose assets if they need to come up with the cost of an unexpected settlement.
- Social Media. Personal umbrella coverage protects against libel, slander and breach of privacy. The level of confidence internet users feel when posting from "behind the keyboard" makes it too easy to broadcast messages to hundreds or thousands of people. All it takes is one person to retaliate; whether it's the proprietor of a restaurant who receives a defaming review, or the parent of a child whose photos are shared.
- Teenagers. Might not fully understand the scope and potential impact of their behaviour. And if a dependent is responsible for a damaging action or breach of privacy, the parent may be responsible.
- Auto accidents. When someone is at fault for a collision involving multiple vehicles – especially if any of the victims experience loss of future income or require long-term care – their standard coverage gets eaten up quickly.
- Hosting events. Small get-togethers involving close friends and family appear low-risk at first glance. We hope our loved ones wouldn't sue, but in cases where compensation is needed, the decision to pursue legal action becomes less personal and more about necessity.
A personal umbrella policy is often more affordable than increasing liability on each individual base policy. Our world is evolving, so the way we protect ourselves must change too.
Contact Us to find out more about Umbrella Coverage and if it is right for you.