Umbrella Liability Insurance Basics for Dentists 

October 9, 2023 Kelly Brady

Umbrella liability coverage provides additional liability protection over and above your existing policies. A personal umbrella is going to provide that coverage over your auto insurance, your boat insurance, and your renters or homeowners insurance.

Typically, you must have a minimum amount of coverage in each of those areas. Usually, it’s $300,000 in bodily injury for your auto and about a hundred thousand in property damage. And then also for your homeowners, you usually need a minimum of $300,000 in liability coverage for your homeowners or renter’s policy. For example, if you have an auto claim where you’re at fault, and there is a half million dollars in bodily injury and the underlying limits on your policy are $300,000, your policy will pay the $300,000. The additional $200,000 that you owe would be paid by the umbrella. With a one-million-dollar umbrella, you have $1.3 million in coverage.

Umbrellas Provide a Lot for Relatively Little

By buying an umbrella policy, you’re adding a lot more protection at a very low cost. They come in increments of a million dollars, and you can buy several million more.

The beauty of this is that that policy may only cost a few hundred dollars a year depending on the features you might add to it. Umbrella policies might protect against some unusual things, for example, slander and liability claims. If you have a second home that you visit or rent, the umbrella will usually cover the liability.

Life is full of surprises, so it is wise to have a lot more coverage than the minimum homeowners and renters insurance policies provide.

Commercial Property Insurance

I think every dentist needs at least a one-million-dollar umbrella covering their commercial property. If something happens on your property for which you are liable, a lawsuit can run into high dollars—some run into multiple millions. If you have $1.5 million in commercial assets, at least $2 million in total liability coverage would be appropriate. Someone could have a $2-million-claim by tripping and falling, even if your commercial assets do not amount to that much.

Professional Liability Insurance

Regarding professional liability, you can’t buy an umbrella but you can buy more base coverage. Base coverage is usually available in million-dollar increments. If you have concerns, contact your insurance providers, as well as other providers to compare policies and costs. It could be inexpensive for you to have the extra financial security of an umbrella.

Additional Considerations

  • When purchasing umbrella liability insurance, the extra millions above the first million are usually less expensive than that first million.
  • If you have children under the age of 25 who are drivers under your auto insurance policy, an umbrella policy will have an added charge to cover the extra risk of the young driver.
  • If someone were to injure you or your auto and they are underinsured, your auto insurance liability umbrella might kick in and cover your expenses. That’s something to look into and consider when making insurance choices.

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