Why Excess Liability coverage is important

Sometimes things go wrong – a car accident, a guest slips and falls on your property, or a lawsuit. If you don’t have the right coverage, an unfortunate situation can compromise your financial security. Find out what Excess Liability (Umbrella) coverage is, and why it's important. 

Excess Liability Insurance is designed to respond when the underlying liability limits of your other policies, like homeowners or auto, have been exhausted. For example, if you were to be injured in a car accident and needed expensive surgery, your auto policy’s underinsured motorists coverage would likely provide reimbursement for the costs beyond what the at-fault driver's own Liability limits would cover. For those unexpected costs above the at-fault driver’s liability policy and your own underinsured motorists coverage, Excess Liability coverage may apply. There are many circumstances, however, where Excess Liability insurance could prove valuable. 

Here are some common life scenarios where it may make sense to have an extra layer of coverage should an accident happen: 

• I own a home
• I regularly drive a car
• I have children who drive or are away at school
• My home has a swimming pool
• I employ a housekeeper, nanny, gardener and/or other domestic staff
• I have a dog
• I own a boat
• I entertain at my home
• I blog, tweet, and/or post comments or photos online
• I serve on a board of a non-profit and/or a for profit organization
  
  

If one of the above risk factors is present with your lifestyle, you should consider purchasing Excess Liability coverage, as depending on the situation, you may have higher-than-the-average exposure to liability risks. Ask your insurance agent to look closely at your limits of coverage and determine if they are accurate.

The incidents below are examples of actual liability claims in excess of a policyholder’s primary liability limit. These scenarios represent only a sampling of the types of claims that can occur every day.

1. Multiple dogs bite neighbor
While taking items to his trash, a man was attacked by a neighbor’s three dogs, which had escaped through an open gate on the neighbor’s property. The man sustained multiple lacerations to both legs and a lower back injury and asserted the dogs’ owner was liable for his injuries. The claim settled under the dog owner’s excess liability insurance policy after investigation and negotiation.

Total Claim Payment*: $7.7 million


2. Technician falls while working in home
After completing his work in the attic of a customer, a heating and cooling service technician fell through the floor of the attic, falling nearly 20 feet. He sustained injuries to his back, hand, foot, ribs, shoulder and wrist. The technician alleged the customer homeowner was liable for his injuries. The claim settled under the homeowner’s excess liability insurance policy.

Total Claim Payment*: $8.9 million


3. Pedestrian accident results in severe damage
While traversing a crosswalk, a woman was struck by an oncoming vehicle. The impact resulted in a traumatic brain injury and damage to one leg that ultimately necessitated an above-the-knee amputation. The woman alleged her injuries were caused by negligence of the vehicle’s driver. The claim settled under the driver’s auto insurance and excess liability policy.

Total Claim Payment*: $26.2 million

*The total claim payment is inclusive of both underlying coverage as well as the excess liability coverage.

If you have a swimming pool at your home or plan to host parties or gatherings, here are a few tips to be mindful of:

• Enclose your swimming pool or yard with a fence that includes self-locking and self-closing gates.
• Never leave a child unattended around the pool. Keep your eyes on swimmers at all times, or designate an adult supervisor.
• Be aware of your local weather conditions and never go swimming during thunderstorms.
• Be sure all walkways and stairs at your home are clear of obstacles, ice, and debris.
• Maintain adequate lighting, especially in high traffic areas and on stairs.
• Never serve alcohol to minors.
• Guests intending to drive immediately after the occasion or those who have had too much to drink should not be served alcohol.