Just like any insurance policy, an Ohio umbrella insurance policy doesn’t cover everything. This article lists several common exclusions, including two that are a surprise to many.
Personal Umbrella Insurance does NOT cover punitive damages
What does this mean? Punitive damages are legal-ese for damages designed to punish the other party. They are meant to “set an example” or “send a message” if you will.
Punitive damages are awarded for outrageous, totally reckless conduct — at least what a judge or jury perceives to be outrageous, totally reckless conduct.
You can usually buy umbrella policies with $1 million limits for $200 to $300 a year. If you need more than $1 million limits, you can usually buy each extra $1 million of coverage for $100 to $200. Think about this. For only a few hundred dollars, you can increase your per-person liability limits 10 times, 20 times, even 30 times — and it applies to both your auto and homeowners/renters/condo policies as well.
Personal Umbrella Insurance does not cover activities of an insured as a director or officer
This is usually a surprise to many. Do you serve as a member of a board of directors? Many of us do. There has been a longstanding assumption that an umbrella policy will provide liability coverage while serving on a board. Not always.
Some insurance companies make an exception, however, if the following conditions are met:
– Business or association must be not-for-profit/non-profit; AND/OR
– You cannot receive any compensation for serving on the board.
If the board is a for-profit company and/or you get paid for your service, the umbrella policy will not provide liability coverage for your activities on that board. Although this is a pretty common practice, please note I am speaking in generalities. When in doubt, ASK your insurance agent or company for clarification.
Additional personal umbrella policy exclusions
- Injury to an insured- you can’t be liable to yourself. Remember, liability coverage pays for bodily injury or property damage to OTHERS. You, your spouse and household members are NOT others.
- Professional Services- think malpractice or errors & omissions, such as medical malpractice, or professional insurance for lawyers, real estate agents, financial planners, and of course, insurance agents.
- Intentional Acts- if you cause harm or injury to a person on purpose, no coverage. However, this doesn’t apply if it’s self-defense.
- Business- why? Because Business umbrella policies exist for business liability. The personal umbrella is not designed to provide protection for a business.