Mayo Associates, Northfield, Vermont

Personal Liability Umbrella Coverages
Please Note: WE CAN NOT QUOTE ON OUT OF STATE INSURANCE.

A Personal Liability Umbrella policy, also known as an Excess Personal Liability policy, provides an extra layer of liability coverage in addition to the limit of liability on each of the insured's underlying personal liability policies (i.e. homeowners, personal automobile, boat-owners, motorcycle, et al personal liability policies).


Although primarily limited to personal liability coverages, some Personal Liability Umbrella policies also include some limited coverages for certain small business pursuits and not-for-profit pursuits. However, depending on the business and the particular policy contract, an insured may be well-advised to buy a Commercial Liability Umbrella policy. Some Personal Liability Umbrella policies will provide excess coverage for personal aircraft liability and uninsured motorist coverages; some will not. Please contact us to discuss the various contracts.


The benefit provided by a Personal Liability Umbrella policy is provided in $1 million increments for bodily injury, personal injury, and property damage liability coverage in excess of the insured's underlying (primary) coverages, or in excess of the insured's "self-insured retention" limit (SIR), when the umbrella policy's coverage is broader than the underlying policy.

Personal Liability Umbrellas are extremely broad (ask Pres. Clinton; Chubb, his PLU underwriter, settled with six figures with Paula Jones). The coverages provided by Personal Liability Umbrella policies which are broader than the coverages of the underlying policies are commonly referred to as "drop down" coverages. "Drop down" coverage derives its name from situations in which a Personal Liability Umbrella policy covers an entire loss (minus the chosen self-insured retention limit (SIR). This occurs when the cause of loss is covered by the Personal Liability Umbrella policy, but excluded from the underlying policy. Please note that the self-insured retention limit (SIR), which is usually $250, applies only in the case of "drop down" coverage, and does not apply to covered losses above a primary underlying personal liability policy.


For example, a Personal Liability Umbrella policy covers "personal injury" liability such as: bodily injury, property damage, sickness, disease, disability, mental anguish, false imprisonment, wrongful entry, libel, slander, humiliation, defamation of character, invasion of privacy, etc.; while most primary personal liability policies cover only "bodily injury" and "property damage" liability. Thus, a loss involving liability regarding a libelous statement in the newspaper, would be excluded by the underlying Homeowners policy, but covered by the Personal Liability Umbrella policy; the loss would be covered from the first dollar amount above the self-insured retention limit (SIR), up to the policy limit.

Perhaps the most valuable aspect of a Personal Liability Umbrella is the coverage for the cost of defense of law suits. In addition to the selected limit of liability, most Personal Liability Umbrella policies also pay for defense of suits that are not payable by the underlying policies, all expenses incurred by the insurance company, all costs taxed against the insured, premiums for appeal bonds, reasonable expenses incurred by the insured at the insurance company's request, and interest on unpaid judgments.

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