What it is
An umbrella policy is named after the notion that an umbrella covers a large swath of area at once. An umbrella policy can cover many different aspects of an individual’s life at once. However, there are also umbrella insurance policies that are meant for companies as well. This is a much more common occurrence, as companies are usually in need of more comprehensive types of insurance plans.
2 – Who it is for
Although an umbrella policy can be made out for any individual or business entity, it is usually meant for an enterprise-level business with many different interests that need to be covered at once. Companies that do business in many countries or have suppliers from all over the world will usually need an umbrella policy in order to protect themselves from the various accidents that can occur in many places down the supply chain.
3 – How it works
An umbrella policy works in a very sophisticated way, with the company and the underwriting insurance agency deciding on how the policy will play out depending on different actions. The policy will usually be written out line by line and dictate in great detail the percentage of monies that will be paid out by the insurance agency and by the company.
4 – Different types of coverage in existence
The two main types of insurance policies that are defined as umbrella policies fall under the realm of personal and business policy.
5 – Major benefits
For a large business, an umbrella insurance policy covers all of the major aspects of the business without having to worry about creating a policy for each and every aspect. There are also many benefits for a smaller company or an individual to deal with an umbrella policy. Perhaps the main benefit is the wide protection that is afforded by the policy.