Umbrella insurance is insurance coverage used to protect your school from liabilities that exceed your underlying insurance coverages (general liability and commercial auto insurance, for example). It also can kick in to fill in gaps that other policies don’t cover.  It can give you access to higher limits of protection from risks at an affordable rate.

Increased financial protection from unexpected risks
Even if your charter school is already covered under a General Liability Insurance policy, you might face a legal judgment or settlement—or a costly repair—that exceeds your coverage limit under that policy. Just as an example, say you carry $1 million in General Liability and are required to pay out $2 million for a judgment resulting from an accident that took place at your school. If you carried a $1 million Umbrella policy, it would cover what your General Liability didn’t—saving you from having to pay those funds out of pocket or selling off assets to cover the difference.

May cover additional liabilities not covered by other policies
Many umbrella policies may kick in to cover damage or losses that aren’t covered by a primary policy like General Liability, acting as first-dollar coverage. In insurers’ language, the policy “drops down” to cover the liability as to the primary insurance. This typically occurs with coverages excluded from a standard General Liability policy; some examples of this kind of coverage are non-owned watercraft and aircraft and advertising liability.

As with any risk protection strategy, you first need to evaluate the risks faced by your school.  Many states also require that charter schools carry an umbrella policy as part of their required insurance stipulations.

If you decide to take out an umbrella policy, make sure that it is concurrent with your primary policies—that they cover the same time periods.  Otherwise, you could be left without coverage in the event of a claim.