Personal Umbrella Policy Continued

Work-Related home premises liability is liability for injuries to those coming on your premises for business purposes, such as a courier bringing a package from your employer, who falls on your premises and sues for their injuries. Homeowner policies completely exclude business-related lawsuits. These are people that either have home businesses or bring business home to work.

This is one of the most overlooked exposures not covered by homeowner’s policies. This coverage under an umbrella policy sometimes is provided only if there is underlying coverage on the homeowners and sometimes even if underlying coverage is added to the homeowners, the umbrella will not extend unless you ask for and pay for additionally a separate incidental office endorsement to the umbrella policy.

Employer’s liability is coverage for clients with domestic workers (nannies, handyman, personal care attendants); this exposure is completely excluded by underlying policies. It is available through some umbrella policies sometimes requiring underlying primary coverage or sometimes as a freestanding coverage not requiring underlying coverage at all.

Many times an individual assumes liability when they sign a contract. At times the exposure is a huge and assumed unwittingly. Here are some examples:

1. An individual has an elevator installed in his/her home. The contract with the elevator maintenance company requires the individual to defend and pay judgments against them even when the cause of the injury was at least partially caused by the negligence of the elevator maintenance company.

2. A wedding reception contract contains a restaurant requirement that the bride and groom defend and pay judgments against the restaurant even if caused by the negligence of the restaurant (i.e., 100 guests getting seriously ill from food poisoning).

3. A group of friends, all turning 30 years old, rent a building for a birthday party. In the contract, one of the friends agrees to defend and pay any judgment the building owner for injuries or property damage regardless of who was at fault.

Each of these examples represent a liability exposure that is largely uninsured by primary liability coverage. Many of these exposures are excluded by some umbrella policies but are covered by others. To properly manage risk, the Independent agent must first determine what liability risks your client faces that are not insured by his primary policies. Then locate an umbrella policy or policies that best covers as many of these uninsured risks as possible.