What type of incidents does umbrella insurance primarily cover?

Umbrella insurance is designed to provide additional liability coverage beyond what is included in standard insurance policies, such as auto or homeowners insurance. It primarily covers incidents that exceed the limits of these standard policies. For example, if a general liability policy provides coverage up to $500,000 and a judgment arises from a claim amounting to $1 million, the umbrella policy would kick in to cover the excess amount of $500,000.

This type of insurance is particularly valuable in situations where claims may arise, such as personal injury, property damage, or certain lawsuits. It offers an added layer of protection against the potentially high costs of legal defense and settlements, thus safeguarding personal assets that might otherwise be at risk.

The other options don't accurately reflect the scope of umbrella insurance. It does not focus solely on property damage, and it is not limited to health-related claims or incidents that occur during specific times, such as outside business hours. Instead, its broad coverage is meant to provide security against unexpected and significant liability risks that can lead to substantial financial losses.