Coverage on your farmowners insurance policy will provide protection if someone is injured on your property. However, coverage is subject to the limits of liability on your policy. If there is serious bodily injury, will your limits be adequate?
What would happen if you were held liable for a settlement that exceeded those limits? You would be held personally responsible for paying any portion of the settlement that your insurance company did not pay. Your present assets – your home, your savings account, your car, your horses and any other assets you might have, as well as your future earnings could be taken from you to pay the settlement.
Do you need an umbrella policy? Umbrella policies are more affordable than you may think and they provide broad liability coverage. The policy becomes effective when your underlying coverage limits are exceeded. It shields your assets more broadly than the primary coverage including protection against certain losses not covered by your other policies. It can also provide coverage for claims that may be excluded on the primary policies, such as false arrest, libel, slander and invasion of privacy. Typically, for example, an umbrella comes over your farmowners, auto, recreational vehicle, workers comp/employee liability policies. So if you carry $1,000,000 on the primary policies, you can generally purchase additional umbrella limits in increments of $1,000,000.
Umbrella policies are a good investment in your present and future financial security. If you are weighing the pros and cons, look around your house, your barns, at everything you have amassed. Then ask yourself how you would feel if you had to sell everything in order to pay off the settlement that exceeded your liability insurance limits. The lower your limits the greater chance this could happen.
Contact your equine insurance specialist for further information on purchasing an umbrella liability policy.