What type of liability coverage is specifically designed to protect against unforeseen claims?

• A. General Liability
• B. Errors and Omissions Insurance
• C. Umbrella Liability
• D. Excess Liability

Answer: (C)

Umbrella liability coverage is designed specifically to provide an additional layer of protection beyond what standard liability policies offer. It addresses unforeseen claims that may exceed the limits of underlying insurance policies, such as general liability or auto liability. This type of coverage is particularly beneficial in unexpected or catastrophic events that result in claims for damages that were not anticipated at the time the primary policies were written.

By its nature, umbrella liability coverage extends to various situations that may not be fully covered by other policies, offering broader protection. This includes situations involving personal injury, property damage, and even certain legal fees, enhancing overall security against large and unforeseen liabilities.

The other coverage options do not specifically target unforeseen claims to the same degree. General liability covers common risks businesses face, such as bodily injury or property damage, but does not extend past its policy limits. Errors and Omissions Insurance focuses on protecting professionals from claims of negligence or failure to perform services, typically not covering a broad array of unforeseen events. Excess liability insurance provides additional limits over specific liabilities but does not offer the extensive coverage that an umbrella policy does, making umbrella liability the most versatile and comprehensive option for unexpected claims.