Resources & Insights

Umbrella Coverage: A Critical Shield Against Unforeseen Risks

September 12, 2023

Andy Orlando
Senior Vice President & Partner

Curious Corner: September 2023 Insurance Trends

As insurance advisors, our goal is to protect and preserve our clients’ financial longevity. We work alongside attorneys, wealth managers, and other trusted advisors to develop an overall wealth strategy that shelters clients’ assets and lifestyles. And there’s one area of insurance we tell clients again and again not to overlook – umbrella policies.

Worst-case scenarios aren’t a fun topic of conversation, but it’s a critical discussion. A motorcyclist recently received a $47.5 million judgment for injuries from a car accident. The vehicle’s occupants (all minors) were intoxicated and leaving the defendant’s home, where alcohol was served, when the accident occurred.

Lawsuits of this magnitude used to be rare, but personal injury and product liability cases surged by 97% in 2020. With the increasingly litigious nature of our society, umbrella policies are an essential way to safeguard assets.

Umbrella Policies: The Basics

Umbrella policies essentially attach to existing policies (auto, home, boats, toys, or any underlying liability policies) to expand coverage where those policies leave off. We often see clients with an unfortunate gap between their existing liability coverage and umbrella coverage, so we ensure those policies work together seamlessly to maximize their protective benefits.

Many traditional insurance companies offer umbrella limits up to $5 million, but that amount can fall short of our clients’ needs. A man in Florida received a $7.7 million judgment after being attacked by his neighbor’s dogs – demonstrating that typical umbrella coverage limits aren’t right for everyone. High net worth individuals and families may need a higher coverage amount, which is why we work with specialized carriers that offer policies up to $50 million or even $100 million.

Calculating an Umbrella Limit

There’s no perfect equation for determining the right umbrella policy amount for each client or family. It’s a nuanced combination of qualitative and quantitative, understanding our clients’ risk tolerance, future goals, and overall net worth.

It’s important to remember that umbrella limits shouldn’t be static – they should evolve alongside our clients’ lifestyles and financial circumstances. If someone receives a large inheritance or sells their company, they need to revisit their limits and potentially update those policies in alignment with their new financial position.

Other Essential Liability Coverages

In addition to umbrella policies, additional coverages often round out a strategic insurance approach. These can include:

  • Uninsured/Underinsured Motorist Coverage: It’s estimated that one in eight drivers across the U.S. don’t carry insurance or don’t carry enough to cover the costs of an accident. This coverage can offer support for medical expenses, vehicle repairs/replacement, and more if you are injured in an accident with an uninsured or underinsured driver.
  • Directors and Officers Coverage: Do you serve on a non-profit board? Many small non-profits don’t carry insurance policies, and decisions you make for the organization could put your personal assets at risk in a lawsuit. For example, if the board votes against installing wheelchair ramps and the non-profit is sued for lack of accessibility, the board members’ personal assets could be on the line.
  • Employment Practices Liability:  Anyone who employs nannies, drivers, chefs, housekeepers, or other staff has the same employment exposures as a business. From wrongful termination to harassment, these policies protect you from employment-related risks.


You can also add LLCs and trusts to umbrella policies, which offers enhanced protection for businesses and assets. While LLCs, trusts, and entities can separate ownership interest, they do not separate liability exposure. Each entity, LLC, or trust structure is unique, so speak with your personal and/or commercial advisor(s) to ensure that all entities are appropriately protected.

Umbrella policies are one of the easiest and most cost-effective ways to preserve wealth and protect against the unexpected. While no one wants to consider the possibility of facing a multi-million dollar lawsuit, umbrella coverage can offer peace of mind and financial protection.

The right advisor partnerships make all the difference in a highly competitive environment, and we’re here to help. If you have any questions on your insurance program, please contact Andy Orlando, Senior Vice President & Partner at CCIG Private Client Group at

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