Georgia Surplus Lines Broker Practice Exam

Umbrella insurance is designed to provide an extra layer of liability protection beyond what is offered by standard homeowners or auto insurance policies. The correct answer highlights that umbrella insurance specifically protects against legal defense costs, which can be significant.

In many scenarios involving lawsuits, the costs associated with legal defense can quickly accumulate and exceed standard policy limits. Umbrella insurance steps in to cover these additional costs, as well as any liability costs that might arise from incidents such as personal injuries or property damage caused to others.

While umbrella insurance can indeed cover non-business related losses and personal liability coverage, the unique feature that sets it apart is its enhancement of protection for legal costs. This added layer of defense allows policyholders to feel more secure, knowing that their legal expenses are covered even if they exceed the limits of their primary insurance policies.

This is particularly important in today's legal environment, where personal liability claims can be substantial, and having adequate coverage against legal costs is an essential aspect of comprehensive financial protection.