Umbrella Liability Coverage Law and Legal Definition
‘Umbrella liability coverage’ provides coverage beyond the underlying liability insurance carried by a business. It covers all other liability exposures, excepting a few specifically excluded exposures. Further, umbrella liability coverage offers automatic replacement coverage for underlying policies that have been reduced or exhausted by loss. This type of insurance functions in the same way as any other liability insurance. Insurance claims are received, and evaluated to determine if the contents of the claim are in compliance with the terms of the policy. If the insurer is convinced that the claim is valid, then the compensation is approved and forwarded. A claim has to be submitted to the standard liability provider before submitting a claim on an umbrella liability policy. If the standard liability provider does not cover any loss, such outstanding balance can then be submitted to the umbrella provider for consideration.