When it comes to insurance, you never want to purchase “just enough” coverage. 

Unfortunately, most people have the “it won’t happen to me” mentality because they may consider their lives, simple, boring or low-risk. Often, many of our clients associate liability insurance with business owners or high-income individuals. However, the reality is that anyone can be a target for legal recourse — everyone is vulnerable. 

Because of this mentality, many people opt out of purchasing personal umbrella insurance. This leaves many susceptible to costly lawsuits and subsequent financial insecurity.

In recent years, studies have shown that Canadians are becoming increasingly litigious and legal payouts are rising exponentially. Therefore, Canadians are at an increased risk of losing both assets and money if an unexpected settlement occurs.

So, what is personal umbrella insurance?

As defined by Investopedia, personal umbrella insurance is “ extra liability insurance coverage that goes beyond the limits of the insured’s homeowners, auto, or watercraft insurance. It provides an additional layer of security to those who are at risk of being sued for damages to other people’s property or injuries caused to others in an accident. It also protects against libel, vandalism, slander, and invasion of privacy.”

Although everyone can benefit from the added coverage and peace of mind that umbrella insurance provides, the following people may find this coverage increasingly beneficial: 
  • Individuals who travel to the USA frequently should seek out umbrella insurance as there is a much higher rate of lawsuits there
  • Individuals who own pets, play structures, trampolines, boats, or pools
  • Individuals who own ATV’s, motorcycles, watercrafts or snowmobiles
  • Individuals that volunteer at an organization or serve as the chair, this includes amateur sports, clubs, non-profits, and charity’s 
  • Individuals with a high-risk lifestyle. However, personal umbrella insurance will not cover costs associated with criminal actions or if you intentionally harm someone else.
  • Individuals with a high-net worth or high risk of legal action

Please note: Personal Umbrella coverage does not cover you in business — even if you’re the business owner. Instead, we recommend purchasing a business liability policy instead.

Personal Umbrella policies come into effect when an individual has exhausted their basic liability policy limits. Personal umbrella insurance will usually cover bodily injury, property damage, accidents, libel or slander, defamation of character and invasion of privacy.

Typically, Personal Umbrella insurance covers legal defense fees, attorney fees, monetary settlements, medical or psychiatric bills, lost wages if injured, as well as international coverage.

Here are a five quick examples in which personal umbrella insurance would be beneficial:
  1. The insured’s son invited a friend over to their home for a play day. While the kids were playing, the family dog bit the son’s friend in the face. The damage was so severe that the child required multiple reconstructive surgeries. The injured child’s parents settled for $7,000,000.
  2. The insured’s teenage daughter was on a sports team. The daughter did not like the coach, and made several false defamatory statements online about the coach’s personal life. The coach sued the parents for personal injury and defamation. Subsequently, he was awarded $750,000 which was covered by the parents personal umbrella insurance coverage. 
  3. A babysitter was watching two young children in the summer. A small pool was set up in the family’s backyard for the children. The babysitter heard the phone ring. Before running inside to answer the phone, she ensured that neither of the children were near the pool. Unfortunately, when she returned one of the children had drowned in the small pool of water. The court awarded the child’s parents close to $10,000,000.
  4. The insured’s tenant claims that she lost her hefty basketball scholarship to a 4-year university after she became ill and could not play. Doctors and specialists determined that she lost part of her lung capacity due to black mold found in her apartment. The tenant claimed she suffered permanent lung damage, and received $800,000 from the rental company.
  5. The insured was driving a boat on the lake. He did not see a swimmer in the water, and accidentally hit and severely injured the swimmer. The swimmer received just under $1,000,000.

Ultimately, the world is evolving and litigations are becoming more frequent. Although you may think that your life is low-risk, it’s impossible to predict the actions of others. 

Contact Haas Insurance today to learn how you can further protect yourself and your loved ones with the help of a personal umbrella policy. Personal umbrella policies provide coverage that goes above and beyond the limits of your insurance, and provides coverage for specific risks that are not covered by your current home and auto policies. 



Contact us to get your insurance started today or call for advice.

Contact Us    Call 519-471-7740