Published: April 2016
We all make silly comments from time to time. But what if you're sued for something you say? Or something you write? That may sound like a far-fetched concept, but consider a scenario where you write a negative online review of a business or you post an unfavorable comment about a person on social media and you're sued as a result.
It does happen. And that's where a personal umbrella insurance policy may help. This optional coverage provides liability protection that may help protect you in a number of situations, such as if you're sued over alleged libel or slander.
A personal umbrella policy provides you with a layer of liability protection. It may help cover the cost to defend you against a claim in court and may even help pay for a legal settlement made against you.
An umbrella policy typically kicks in once you've reached the liability limits on an underlying policy, such as homeowners or auto insurance. So, for instance, if a visitor was injured at your home and you were sued as a result, umbrella coverage may help cover legal expenses if they exceed the limits of your homeowners policy.
In other cases, such as a libel or slander lawsuit, it may provide liability protection for situations that may not be covered by other types of insurance.
According to the Insurance Information Institute, personal umbrella policies are typically available in $1 million increments. But you usually have to meet certain liability coverage requirements first: For example, most insurers will want you to have at least $300,000 in homeowners liability coverage before they'll sell you an umbrella policy.
While an umbrella policy may help prevent you from paying out of pocket if you face a legal judgment for defamation, not every scenario is covered by a personal umbrella policy. Here are a few typical exclusions:
- Your alleged libelous or slanderous statement is related to a business you own
- Your policy wasn't in force at the time the comment was said or written
- You intentionally make a false comment or statement that defames someone else
While you probably don't expect to face an accusation of libel or slander, mistakes can happen and the repercussions can be costly. An umbrella policy may help give you the peace of mind that comes with knowing you have extra liability protection in place, just in case.