Canadian Underwriter

Paid Why your clients need personal umbrella coverage

October 2, 2019   by Graham Haigh, VP, Broker Distribution, Wawanesa Insurance

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Convincing someone that they could have more coverage than they do now – often for less money – should be a slam dunk. Right? That’s exactly what personal umbrella policies offer. So why aren’t they more popular? Let’s break it down and review tips for how to talk to your clients about the importance of personal umbrella coverage.


The definition

A personal umbrella policy provides additional coverage when a client’s base liability coverage is exhausted. It covers legal fees and loss of income associated with liability claims – even for incidents that occur outside of Canada.


The challenge

Coverage that protects property is an easy concept for clients to buy into. It’s straightforward to understand and is often mandatory. The need becomes less clear when it comes to coverage that protects against legal action.

Many clients associate liability with businesses or high-income earners. The reality is that most of us are targets for legal recourse, even when going about our regular, low-risk lives. Pet owners, social media users, people who do volunteer work… wealthy or not, these people are all vulnerable.

Trends suggest that Canadians are becoming more litigious, and court cases are resulting in larger payouts. And while lawsuits don’t directly result in the loss of the ‘things and stuff’ protected by standard personal insurance policies, people could indirectly lose assets if they need to come up with the cost of an unexpected settlement.

Finally, when you consider the modern hazards that impact our safety (e.g. texting while driving), it’s hard not to appreciate how unpredictable an everyday task can be – or how far a resulting lawsuit can go.


Start with a conversation

Get to know your clients. Sincere engagement does wonders for customer loyalty, and it has the side effect of revealing important insights. For example, do they:

  • Have children?
  • Have hobbies?
  • Do volunteer work?
  • Travel frequently?
  • Own rental properties?
  • Use social media?

Clients who answer ‘yes’ to any of these questions are candidates for personal umbrella coverage. What’s holding them back? Awareness is a major factor. But once you resolve that…


Overcome the “it won’t happen to me” mentality

There’s a misconception that court battles are the stuff of TV dramas. In many people’s minds, their ‘boring lives’ are enough protection. Here are four relatable scenarios to share with your clients to demonstrate how a personal umbrella policy could save the day:

  1. Social Media. Personal umbrella coverage protects against libel, slander and breach of privacy. The level of confidence internet users feel when posting from ‘behind the keyboard’ makes it too easy to broadcast messages to hundreds or thousands of people. All it takes is one person to retaliate; whether it’s the proprietor of a restaurant who receives a defaming review, or the parent of a child whose photos are shared.
  2. Teenagers. They’re maturing and finding their independence, which is exciting for parents to see. What can be concerning is the fact that they don’t fully understand the scope and potential impact of their behaviour. And if a dependent is responsible for a damaging action or breach of privacy, the parent may be responsible.
  3. Mandatory or not, auto accidents are so common that it’s undeniably smart to have this coverage. But base policy limits are relatively low considering the potential damages. When someone is at fault for a collision involving multiple vehicles – especially if any of the victims experience loss of future income or require long-term care – their standard coverage gets eaten up quickly.
  4. Hosting events. Small get-togethers involving close friends and family appear low-risk at first glance. However, unpredictability increases when you add variables like alcohol, pets, or small children. We hope our loved ones wouldn’t sue, but in cases where compensation is needed, the decision to pursue legal action becomes less personal and more about necessity.

A personal umbrella policy is often more affordable than increasing liability on each individual base policy, and it protects the actions of your clients and their families wherever they are in the world. As sensibly as we might go about our lives, we are all subject to the unpredictability of other people’s actions.

The bottom line for your clients; our world is evolving, so the way we protect ourselves must change too.


Graham Haigh began his insurance career in BC in 1994 after earning his Bachelor’s degree from Simon Fraser University and attaining his FCIP and CAIB designations. He is a past President of the Insurance Institute of BC and an award winning instructor for the Insurance Institute of Canada’s CIP program.

He joined Wawanesa Mutual Insurance Company in 2009 as Regional VP for BC & Yukon. In 2015, Graham moved with his family to Winnipeg to run Wawanesa’s Central region. He accepted the role of VP, Broker Distribution in 2019.

He can be reached at 204-985-3930 (office) or by email at

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2 Comments » for Paid Why your clients need personal umbrella coverage
  1. Joe Stonehouse says:

    Personal Umbrella policies should be a slam dunk but are actually an E & O claim in the making. Firstly, it is gathering a lot of information that a broker may or may not have in their own file with minimal remuneration. Most policies require customers to inform the broker whenever there is a change, which may or may not happen, which then creates an endorsement, invoice & letter for a minimal premium. In BC customers obtain car insurance at an auto dealer when they purchase a new car or go to an autoplan broker that may be closer to where they live and customers just don’t think to call their main broker to advise they need to change their Umbrella Policy. Only one underwriter that I know has figured this out. Premier Marine has an umbrella policy and at the start you declare the number of homes, cars, boats, etc. that you own and if during the year this changes you are automatically covered. All the broker has to do is confirm any changes at the renewal date. Still a fair bit of work for about a $250 policy but better coverage for your customer and should be looked upon as part of the customers overall account and much less E & O exposure.

  2. Wendy Lee says:

    I agree with what Joe Stonehouse said, potential E & O claim for brokerage. I saw a CNS policy with Personal Umbrella policy from another agency that has LOB to our agency, the ICBC third party underlying limit is $10,000,000. No one seems to pick up this error. If a claim arises, will CNS pay the loss? We have to be extra careful with clients purchased Personal Umbrella policy. This is a good product to sell but needs to remind our client to notify the agent for any changes.

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