Usually, when most people think of their insurance needs, they only think of certain types of coverage. Health insurance and life insurance cover you and your loved ones; Car insurance and homeowner or renter protection cover your basic property.
Personal liability insurance in Ontario often referred to as an "umbrella" policy, is rarely on this list. But when it rains – or a costly legal dispute, sometimes just an umbrella helps.
As the name suggests, personal liability insurance is primarily used to protect against liability claims. In most cases, this means that you and your assets are subject to civil proceedings. Personal liability insurance may seem overwhelming to a person who already has three or four insurance policies.
Indeed, not everyone needs such protection. But shared policies effectively protect your assets and future income against claims for damages that can arise from various scenarios. Like beach liability insurance, liability insurance is a product you hope you'll never need but can provide significant peace of mind in the meantime.
Several levels of personal liability insurance are built into owner insurance and vehicle insurance. For many people, this may be enough. This is partly because certain types of assets are protected by state and federal laws.
You can also protect certain assets from litigation through real estate planning tools such as a well-structured and funded irrevocable trust. However, be careful to form such a trust immediately after an incident that you are concerned about could result in lawsuits.