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Personal Umbrella Insurance Coverage Ontario

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Ontario Umbrella Insurance

Think of how useful an umbrella can be. It protects you from the rain in stormy weather by offering better coverage over and above your raincoat and hat. When it comes to umbrella insurance, Ontario residents can benefit in a similar sense because it provides an extra layer of protection with liability coverage above what your car and home insurance policy provide. An Ontario umbrella insurance policy will provide broader coverage for additional exposures than what the underlying policy—your home insurance or auto insurance policy—may provide.

What is Umbrella Insurance?

Also known as excess liability insurance or blanket insurance, a personal umbrella insurance policy is a type of personal insurance that fills in the gaps that your other insurance policies (such as home, auto or boating) leave behind. It provides extra liability insurance on any additional risks you might identify. Consequently, you are protected from all fronts. Umbrella insurance is part of your complete protection strategy.

For example, imagine your dog gets loose from your backyard and bites your neighbour. A situation like that would typically be covered under your home insurance policy, but if your neighbour sues you to cover the cost of their medical bills and additional compensation for pain and suffering, the settlement and legal fees combined could far exceed the coverage limits on your home insurance. Once your home insurance policy reached its limit, your umbrella insurance coverage would kick in to pay the rest of the costs, up to your umbrella insurance policy limit.

Why is Umbrella Insurance Needed?

Many types of situations that would call for your insurance company to provide funds for repair or replacement, like a fender bender or hail damage to your house from a storm, can be handled under your basic auto or home insurance. Liability issues are different. If you are sued because you allegedly caused bodily injury or property damage—even if the charge was groundless, false or fraudulent—you will be forced to defend yourself in a court of law. The costs for a robust legal defense alone can be financially devastating, and that's not even including settlement costs for medical bills, property damage restoration and more should the other party be successful in their lawsuit against you.

In all likelihood, the legal defense fees and settlement expenses in scenarios where you're liable for bodily injury or property damage would exceed the limits of your standard insurance policy. Without the additional financial safety net that is provided by umbrella insurance, Ontario residents are responsible for paying out of pocket for any expenses that go over and above those insurance liability limits, which could cause severe financial loss that takes years or decades to recover from. Umbrella liability insurance is a simple way to give you the additional coverage you need to avoid a catastrophe that could set you back for a long time.

Who Needs Personal Umbrella Insurance in Ontario?

You likely have several insurance policies to protect your home, your car and various other belongings. However, policies do not often cover every possible risk and might leave you paying huge expenses out of pocket if you don't have umbrella insurance. Ontario insurance providers offer this type of policy addition to help alleviate the financial burden of expenses like legal fees in the event that you are sued or cover liabilities that exceed the limit of your other policies. If you do not want to leave any such risk up to chance, umbrella liability insurance is for you.

Everyone has some level of vulnerability to liability risks. There's simply no way to prevent every accident or error in judgement that could lead to someone bringing legal action against you for causing some type of harm—not to mention the fact that you could be accused of something you truly weren't responsible for and be forced to hire legal representation to defend you in court. That's why absolutely everyone should at least consider investing in umbrella insurance. Ontario residents should know that the cost of umbrella insurance is very affordable, but the peace of mind it offers you is absolutely priceless.

That being said, some people have greater exposure to liability risks than others. Someone who owns their own business, coaches their child's soccer team, volunteers for non-profit organizations and is, in general, very active in their community is more at risk of encountering a situation that could trigger a lawsuit than a dedicated homebody who rarely leaves their house and doesn't enjoy interacting with others. Here are some activities or scenarios that could expose you to increase liability risk:

  • You're a frequent traveller
  • You own recreational vehicles or equipment such as a skidoo or jet ski
  • There's a pond, swimming pool or trampoline on your property
  • You volunteer for school field trips
  • You frequently host parties and other events
  • You have teenage drivers in your household
  • You coach children at sports or other activities
  • You serve on a board of directors
  • You rent out property on a short or long-term basis
  • You are responsible for managing a family trust
  • You employ staff members for your household
  • You own horses, livestock, large dogs or other animals with the potential to cause injury

You can't avoid your interests and responsibilities just because you're worried that you might be sued, which is what makes umbrella insurance an ideal solution that lets you get out there and enjoy life without fear of financial loss.

What Does Umbrella Insurance Cover?

An umbrella policy is an additional layer of liability insurance over your home, car, motorcycle, cottage, and watercraft and snowmobile policies. Umbrella policies broaden the definition of your primary policy with additional liability coverage that gives you added safety against loss.

However, it's important to note that umbrella insurance doesn't just extend the limits of coverage you already have from your home and auto insurance. Your Ontario umbrella policy may also cover certain risks from the first dollar of loss or liability incurred which are not covered under your primary policies. The umbrella policy is said to "drop down" to cover them as primary insurance and fill in the gaps in the underlying policies. That includes financial protection if you are sued for:

  • Defamation of character, slander and libel
  • Mental anguish
  • Malicious prosecution
  • Imprisonment, illegal detention or false arrest
  • Wrongful eviction
  • Invasion of privacy

In addition, your umbrella insurance may include extra coverage such as compensation for your loss of income if you are sued and need to take time off work to prepare and execute your legal defence strategy.

Does Umbrella Insurance Cover Legal Costs If the Defendant is Found Not Responsible?

If you are sued and the court finds you not responsible for damaging or injurious incident, your lawyer still has to be paid. With umbrella insurance, Ontario policyholders will still receive insurance compensation for attorney fees, even if the lawsuit brought against them was groundless, false or fraudulent.

What are Some Situations That Could Lead to an Umbrella Insurance Claim?

For the most part, umbrella insurance in Ontario gives you additional financial protection for coverage that would first come out of your auto insurance or homeowners insurance. But there are also a few types of coverage that are exclusive to your umbrella insurance. Here are a few examples of various situations that could cause you to need umbrella liability insurance:

  • You make a big batch of cupcakes for your child's school bake sale and are sued by parents when several children get food poisoning from your contribution.
  • Your spouse writes a series of negative reviews about a restaurant, claiming to have seen signs of a rodent infestation and unsavoury kitchen practices. The restaurant could choose to sue in an effort to prove the reviews wrong and salvage their reputation in the community.
  • Your teenager goes to a house party and indulges in alcohol, then decides to spray a can of fire retardant powder all over the living room—even though nothing's on fire. The house's owners sue you for clean up and property damage restitution.
  • Your kindergartener pushes another kid off the monkey bars at school and that child sustains facial injuries that require cosmetic surgery, prompting their parents to sue you for the cost of restorative surgery.

As you can see from the above examples, umbrella insurance doesn't just protect you. It protects all the members of your household who are included on your homeowners insurance policy, so you can rest easy knowing you won't suffer major losses if a lawsuit is brought against you.

What is Not Covered by Ontario Umbrella Insurance?

When considering what's not covered by umbrella insurance, it's important to remember that it is specifically liability coverage. That means it covers you in situations where you are allegedly liable for injury, property damage or personal harm to another person. It does not cover your expenses should you be the one who is hurt or if your property sustains damage. Umbrella insurance does not cover:

  • Criminal acts committed by the policyholder
  • Repair or replacement for your personal belongings
  • Medical expenses if you are injured
  • Commercial losses associated with your business (that falls under business insurance coverage)
  • Liability you assumed in written or oral contracts
  • Damage that was caused on purpose by you or a member of your household
  • Liability issues that arise from war, terrorism and armed conflicts

Does Umbrella Insurance Apply When Travelling Outside Ontario?

Yes, it does. That's actually one of the big advantages of umbrella insurance. Ontario residents who encounter a situation where they are liable for injury or property damage while out of province or out of the country can rely on their umbrella insurance to provide worldwide protection against the costs associated with legal defence and legal settlements. It offers the same level of protection regardless of where you are in the world when the incident occurs, or where you are when someone accuses you of being liable for injury or damage.

How Much Does Umbrella Insurance Coverage Cost?

An umbrella insurance policy is typically inexpensive and may cost as little as $100 to $267 per year, which makes it a highly cost-effective way to protect yourself from paying expenses for liability claims out of your own pocket. A personal umbrella liability insurance policy is part of a complete protection strategy to provide you with peace of mind.

Your insurance carrier will assess a number of factors when determining your umbrella insurance quote amount, including:

  • Your current insurance coverage
  • Past claims history
  • Your net worth
  • Your home location
  • Your career
  • Other activities that could be possible risk factors

Another important factor will be how much coverage you need to ensure your liability coverage is adequate to protect you. Umbrella insurance coverage limits typically start at one million and go up in 1-million-dollar increments to five million. However, two million is the recommended minimum for most people.

It's also worth noting that the limits on your standard home or auto policy will come into play as well because some companies will only offer umbrella insurance with an equal or higher limit than the original policy. For example, if the coverage limit on your car insurance is two million, your umbrella insurance limit would need to be at least two million. Be sure to speak with a Morison Insurance broker who can review your policy and determine the exact cost of adding umbrella insurance coverage to your policy.

Where Can I Buy Umbrella Insurance?

If you are looking for the extra layer of coverage that an Ontario umbrella insurance policy provides, contact us at Morison Insurance. Our insurance professionals will provide you with a quote and make sure you are properly covered. Get started today by calling 1-800-463-8074, or by filling out the form on our website.


This content is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person, and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.

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