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Woman under umbrellaA key component of commercial umbrella insurance is providing legal defense to its policyholders. Let’s say you are involved in a lawsuit in which a customer claims your product or service caused him or her harm. You may believe that the claim is false. Your insurer may side with you. In this case, it may be more affordable for the insurer to pay for an attorney to defend your case in a court of law instead of paying out a settlement to the individual making the claim. It is important to understand the limits and coverage in place for this type of defense.

Does Your Policy Offer Defense Coverage?

Defense coverage is most commonly a part of the business insurance policy. It is best to look at your policy to know if it is, in fact, covered. If it is excluded, it will be listed on your policy as such. Additionally, some policies will include limitations on how much coverage is available for this need. In short, most insurers will cover defense because it is often less expensive to defend a client than it is to pay a settlement for a claim made against that client.

What You Need to Know

However, even the best commercial umbrella liability insurance plans have complexities to them when it comes to legal defense.

  • In most cases, the coverage only applies to liability claims that the business suffers that are specifically related to the liability insurance. If your policy does not include or even excludes cyber crimes, for example, the defense coverage is not in place.

  • This coverage protects the right of the insurer to take over or participate in the defense of a claim. In other words, if a lawsuit would likely lead to a settlement that the insurer has to pay out, the insurer will take over the legal case or work with the company’s existing attorneys.

  • The coverage may also include uninsured exposures in some cases. In some cases, it will apply even when the loss does not obviously impact the umbrella contract. In short, the insurance company will determine if it is best for the insurer to provide legal defense.


If you are unsure if you have the right amount or type of legal defense coverage, talk to your business insurance provider to find out. Are you covered? Call Porter-Brandenburg Agency at (972) 234-5588 for more information on Dallas business umbrella  insurance.

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