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 on all fronts. Ontario policyholders, this coverage is an important part of your complete protection strategy.  

For example, imagine your dog getting loose from your backyard and biting 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 reaches its limit, your umbrella insurance coverage will kick in to pay the rest of the costs up to your umbrella insurance policy limit.  

Many situations that 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 defence 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 defence 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, 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.  

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 in addition to helping 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 increased 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 in 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 it so critical to have the right umbrella insurance. Ontario policyholders with additional liability coverage can get out there and enjoy life without fear of financial loss.  

With the right umbrella insurance, Ontario residents can get additional financial protection for coverage that would first come out of auto insurance or homeowners insurance. But there are also a few types of coverage that are exclusive to your umbrella insurance. Ontario policyholders, 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 to prove the reviews wrong and salvage its 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. 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, a personal umbrella insurance policy doesn't just protect you. It protects all the members of your household who are included in your homeowner's insurance policy, so you can rest easy knowing you won't suffer major losses if a lawsuit is brought against you.  

If you rent your home rather than owning it, you likely already know how important it is to have the right tenant or renters insurance policy in place so you can get the insurance compensation necessary to replace your belongings if they are damaged, destroyed or stolen. However, your tenant insurance also includes personal liability coverage that is the same or similar to what you would expect to get with a typical home insurance policy. Just like liability coverage on home insurance, the personal liability coverage limits on your tenant insurance are likely not sufficient to get you compensation for the total cost of your legal defence and settlements should you have legal action brought against you in court.  

Not only is it possible to enhance tenant insurance with the addition of umbrella insurance, but Ontario renters are highly encouraged to do so. Most of the same personal liability issues that could befall a homeowner are just as applicable to a renter, so it stands to reason that a renter needs additional liability protection as well.  

Just like with tenants, it's important for a condo owner to have adequate liability coverage from the right personal umbrella insurance. Ontario condo owners may need it even more than other types of homeowners in some cases because a condo owner shares a building or building complex with numerous other homeowners, and that means they have a greater level of exposure to situations that could result in a lawsuit. If you have a condo insurance policy and you're concerned that your liability coverage limits aren't sufficient to address your level of liability risk, give your experienced Morison Insurance broker a call and speak with them about adding umbrella insurance to your condo insurance policy. 

Which option is the most cost-effective depends on a few factors, like the current amount of liability coverage on your primary policy. There may be some cases where adding an endorsement to your existing primary policy is less costly than getting a personal umbrella insurance policy, but typically, the endorsement won't offer you as much coverage as you could get from umbrella insurance, so while it may not cost as much, that doesn't necessarily mean it provides the best value. One of the big benefits of working with a qualified insurance broker is that we'll go through the various options for coverage with you and help you choose the one that makes the most sense for your insurance needs.  

Umbrella is specifically liability coverage — covers you when you are allegedly liable for injury, property damage, or personal harm to another person. Does NOT cover your own expenses if you are the injured party or if your property is damaged. Exclusions include:
• 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
• Liability you assumed in written or oral contracts
• Damage that was caused on purpose by you or a household member
• Liability issues arising from war, terrorism, and armed conflicts

In short, no, it can't. Must file claim on base home or auto insurance first and completely exhaust that policy's liability coverage before filing on umbrella. Ontario insurance companies will reject umbrella claim if primary policy is not fully exhausted. Umbrella premiums were partially determined based on existing primary coverage amount.

Yes. Even if court finds you not responsible, 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.

While there's a common misconception that only high-income earners need umbrella insurance, Ontario residents should be aware this is not the case. If found liable and cannot pay a court-awarded settlement, solutions such as wage garnishment may follow. Low income does not protect from being sued. Legal defence costs apply even if found not liable.

Yes, it does. That's actually one of the big advantages of umbrella insurance. Worldwide protection for liability-related legal defence and settlements, regardless of where the incident occurs or where the accusation is made.

No. Names suggest similar 'covering gaps' intent but these are different products. The main difference lies in the fact that umbrella insurance is additional coverage for liability while blanket insurance is additional coverage for property insurance.