Is umbrella a liability insurance?

No, an umbrella insurance policy is not a liability insurance in itself. Instead, it is a type of liability insurance that provides additional coverage beyond the limits of your primary liability insurance policies, such as homeowners or auto insurance. The term “umbrella” is used because it provides an extra layer of protection that sits above your existing policies like an umbrella.

Umbrella insurance typically covers a broad range of liabilities, including bodily injury, property damage, certain lawsuits, and personal liability situations. It becomes active when the limits of your primary insurance are exhausted. This additional coverage is crucial for protecting your assets and future income in the event of a major liability claim or lawsuit.