Personal Umbrella Liability (PUL) Policy

There is a coverage which many Brokers do not think to offer their preferred clients this product is a Personal Umbrella Liability (PUL) policy.

The PUL policy is an insurance contract designed to accomplish two goals.  First, it increases the liability protection beyond what the policyowner already has in his or her homeowners and automobile insurance policies.  Second, the personal umbrella policy is designed to fill in the gaps in a policyowner's liability coverage since several types of liability exposures exist that are not covered by automobile and homeowners policies.  Together with homeowners and automobile insurance policies, broad personal liability protection is attained through the purchase of a PUL policy.

It used to be that the only people who needed personal umbrella liability policies were wealthy individuals who had sizable amounts of personal assets that would be at risk in a lawsuit.  However, in our very litigious society, many people are realizing that they have a need for more liability insurance than what is provided under their homeowners and automobile insurance policies.  The personal umbrella policy is ideally suited to provide this protection.

The first defining quality of a PUL Policy is it only pays liability claims when the policy limits on the underlying insurance policy are exhausted.  For example, suppose you are found negligent in an automobile accident and the court requires you to pay damages of $3,000,000.  Your PUL insurance policy will pay that portion of the $3,000,000 that exceeds the policy limit in your private passenger automobile insurance policy.  The second defining characteristic of a PUL insurance policy is the broad coverage that is provided.

A PUL policy not only provides liability insurance in excess of the policy limits of the underlying insurance coverages, but it also provides liability coverage for losses which are not covered in any underlying insurance.  For example, libel and slander are two perils that are not covered in the typical homeowners insurance policy for which coverage is provided in most PUL insurance policies.

One critical area where a PUL can be helpful is for individuals who volunteer for non profit organizations.  Any act or omission by you as an officer or member of a Board of Directors of a corporation or organization not formed for profit can be covered, this extension does not apply for work in a for profit corporations.