What is an Umbrella Insurance Policy?
Umbrella insurance is extra liability insurance that tops up your client’s coverage when their primary liability insurance is inadequate.
For instance, let’s say that your client’s landlord insurance has a limit of $1 million, but they’re liable for $1.5 million worth of damages. In this case, their umbrella insurance would kick in and cover the rest of the damages up to its limit. And it covers more than just the damages. It’ll also help landlords pay for their legal expenses beyond the umbrella limits — this way, even if they don’t win the lawsuit, their legal fees are paid.
3 Reasons Why Landlords Need Umbrella Insurance
1. It’s an Affordable Extension to Liability Coverage
A $1 million umbrella insurance policy at Distinguished costs as little as $750 a year. That’s just a little over $2 a day. In return, your client gets enough liability coverage to financially survive even large lawsuits.
A Distinguished City Insurance umbrella policy can provide up to $10 million in extra coverage, depending on your client’s needs. For landlords with several properties, a more extensive umbrella policy would provide an extra layer of protection if multiple lawsuits stack up in a single year.
This umbrella liability coverage is important because tenants can sue landlords for far more than just personal injury. Distinguished’s umbrella policy has several follow-form coverages that help secure the insured if they’re held liable for:
- Bodily injury and property damage
- Advertising injury
- Host liquor
- Contractual
- Auto
- Employee benefit
- Directors & Officers liability for non-profit community associations
Beyond the follow-form coverages, our City Insurance umbrella also covers costs related to your client’s defense. These include:
- Right & duty to defend: The insurer will pay for and be in control of any legal defense coming from the lawsuit against the insured.
- Defense outside limit: The cost of defending your client doesn’t erode their policy limits.
For more details, check out Distinguished’s Express City Insurance Umbrella page, where you can find more specifics on our insurance coverage, exclusions, and liability limits.
2. It’s Convenient for Landlords and Brokers
Umbrella insurance policies are easy to implement — they can cover multiple properties and brokers can quickly submit applications online.
For landlords, the policies are incredibly flexible and capable of covering multiple properties. So, if your client owns one apartment in Cleveland and another in Columbus, they’ll only need one policy.
Contrast this flexibility with setting up a limited liability company (LLC) — another popular option for landlords wanting protection from lawsuits. An LLC does provide some liability protection for your client’s personal assets (more on that later), but setting them up can be a pain. Each state has different LLC laws, meaning landlords will need to hire outside counsel to help them understand which state would be best to incorporate in and what fees and regulations are involved.
For umbrella insurance, the process couldn’t be easier. Landlords simply need to go to you (their favorite insurance broker) and give you their relevant details. Then, you can get them a quote through Distinguished’s online portal.
With Distinguished’s 24/7 Broker Connect Portal, brokers can submit in minutes and get an approved quote in less than a day. If the landlord is happy with the price of the policy, you can bind the policy completely online — no need to chat with one of our sales representatives. If you’re interested in learning more about our online portal, check out our FAQs, contact our support staff, or head over to registration to get started.
3. It Complements Landlord Insurance and LLCs
Landlord insurance or an LLC doesn’t exclude the need for umbrella insurance for rental properties. Although both of these solutions provide some level of coverage, they still have weak points that an umbrella insurance policy can make up for.
Landlord insurance is necessary for every landlord because it covers them in case of property damage and liability suits. The liability coverage in most landlord insurance policies only provides between $500,000 and $1 million of coverage. However, some suits will eclipse this coverage incredibly quickly. For instance, a fatal electrical fire in Milwaukee led to a landlord being ordered to pay $1.35 million in damages.
Another protection that many landlords turn to is LLCs. These legal structures separate the property from the owner in the eyes of the law, so if there are liability claims, the owner’s individual wealth remains safe. However, if a lawsuit is successful and the landlord liability insurance on that property isn’t enough to cover the bill, it might force the insured to sell the property to cover the legal bills of the LLC. By encouraging your client to include an umbrella insurance policy on top of their LLC and landlord insurance, they get the best possible coverage and don’t have to worry about being forced to sell their property or drain their bank accounts if held liable.
Get Landlord and Umbrella Insurance for Rental Properties From Distinguished
Landlords looking for seamless, hassle-free protection for their rental properties should consider getting umbrella insurance and landlord insurance through Distinguished.
Distinguished’s City Landlord Package Insurance comes with essential coverages your clients will need to protect their rental properties. This includes:
- Property insurance
- Liability insurance
- Equipment breakdown
- Backup of sewer and drains
- Ordinance or Law A, B, and C
Distinguished’s Express City Umbrella is follow-form coverage and must be supported by one of our City Package policies. This ensures consistent coverage without conflicting exclusions, gaps, or unexpected policy limitations.
Here are a couple of reasons for your clients to get their rental property coverage through Distinguished:
- Seamless coverage: Since Distinguished’s umbrella policy follows the landlord insurance terms, there are no conflicting rules or hidden gaps.
- One point of contact: No need to juggle multiple providers — get all your coverage through one streamlined process.
- Faster claims processing: Coordinated policies mean fewer delays, disputes, or miscommunications when a claim is filed.
- Easier policy management: Renewals, updates, and changes are simpler when both policies are handled in one place.
For landlords who want comprehensive protection without the administrative headache, pairing Distinguished’s landlord insurance with its Express City Umbrella is the smartest way to stay protected.
Learn More About Our Umbrella Insurance for Rental Properties
Clients are often suspicious when brokers offer policies that seem excessive. No one wants to pay more than they have to in premiums, and it would be easy for the uninformed to view umbrella insurance as a frivolous extra on top of a landlord insurance policy or LLC.
The key to convincing your clients of the importance of umbrella insurance is education: Explain what the liability risks are when renting out property, how much those risks could cost them, and how much that second chute is really worth when they face litigation.
If you or your clients have questions about Distinguished’s Umbrella Insurance for Rental Properties, please reach out to our support team.
To get a quote today, register your brokerage and submit your business through our Broker Connect Portal.
