A lot of people have heard of umbrella insurance, but not too many people are sure if they really need it. This type of insurance protects a person or business in the event that they are forced to defend themselves in a liability lawsuit.

Of course, many people or businesses that have never been sued before simply assume that they don’t need umbrella insurance. Unfortunately, it only takes one incident to convince someone that they should have purchased a policy.

The truth is that a lot of people and businesses do not realize how vulnerable they actually are to a lawsuit. While many people take basic precautions to protect themselves, there is not a lot that can be done to make sure that no accidents ever occur. Furthermore, many businesses realize too late that they are open to frivolous lawsuits from scam artists or other people simply trying to make money.

People or businesses with a lot of assets are typically at great risk for losing everything in one legal action. Even if it obvious that a person or company isn’t to blame for the injury or damage that has occurred, it is not uncommon for the costs to defend against such a lawsuit to climb into the tens of thousands of dollars. If there is the possibility of the person or business being at fault, there is the possibility that all of the person’s or business’ assets could be given to the victim.

Umbrella insurance can protect you from these treats in several ways. To start, these policies typically provide basic legal counsel in the event that a person or business is hit with a lawsuit. Depending on the type of policy purchased, funds are then provided to either fight the case in court and/or settle out of court.