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Definition of personal liability insurance

Personal liability insurance essentially covers the insured from civil lawsuits. It is also called umbrella coverage.

Thus, umbrella personal liability insurance provides coverage beyond the insured's primary policy.

In essence, personal liability insurance provides protection against unexpected losses and catastrophic situations. Also, personal liability insurance may provide coverage for the insured's spouse, children and other relatives living in the home.


Personal liability insurance does not substitute for the standard liability coverage, it supplements the standard coverage. When an insured has incurred significant losses as a result of court costs and damages, the costs may extend beyond the limits of the primary insurance.

Therefore, personal liability insurance protects the insured from these additional costs resulting from liability claims. Basically, the primary insurance will cover the losses up to the policy limit, and the personal liability insurance will cover any additional losses. Personal liability insurance covers third party claims against the insured, and payment is usually made to the party suffering the loss.

Coverage Amounts

Amounts in personal liability coverage typically range from £0.6 million to £6 million, depending on a variety of factors. The calculation usually depends on an individual's state of residence and the risk of liability exposure. Typically, £0.6 million coverage has a premium amount ranging from £130 to £195 yearly.


An individual's need for personal liability insurance may depend on the amount and value of his property and assets.

For the most part, it depends on an individual's potential risk of loss to his assets. Nonetheless, every policy holder, including individuals with few assets may need this umbrella policy to cover losses incurred beyond the limits of the primary insurance.


Catastrophic losses, frivolous lawsuits and high lawsuit settlements can occur as a result of liability claims against the insured. The limits on many primary homeowners and auto policies are not enough for unanticipated accidents and negligence costs. Therefore, personal liability insurance enables the insured to be free from unforeseen costs. Without this additional umbrella policy, an individual may be compelled to utilise personal funds to pay any costs beyond the limits of his primary liability insurance.

Moreover, personal liability insurance can cover liability claims against the insured, including slander, libel, invasion of privacy and defamation. It can also pay for medical expenses and legal fees.


Some personal liability insurance policies may not cover liability claims resulting from business matters. A business owner or self-employed individual may need a specific policy that covers business related liability claims.