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Umbrella Insurance For Founders And Tech Employees

Something to pay attention to when you clear about $2 million in assets

Written by: Gabriel Botelho Reviewed by: Max Cho, Licensed Insurance Broker NPN 20377411

If you’re a founder or team member at a startup, an employee at a big tech company, or just have the good fortune to have over $2 million in assets. Then consider umbrella insurance. Especially if you drive! 

Umbrella insurance is a type of personal liability insurance that provides “additional coverage beyond the limits of existing policies” like auto, home, or renters insurance can provide. This type of policy helps protect against catastrophic financial loss in the event of a lawsuit.

There are four reasons to buy umbrella coverage as you build wealth: 

Financial protection: If a settlement or judgment against you exceeds the coverage limit of your primary insurance policies, umbrella insurance can provide additional funds to cover the difference.

Coverage for various incidents: Umbrella insurance covers personal injury, property damage, and defamation. For founders at startups, it can be a helpful shield against a variety of non-business legal claims that can threaten your personal assets.

Peace of mind: The knowledge that additional protection is in place in case of a lawsuit or other legal claim can be calming. This peace of mind is especially valuable for high net-worth and visibility individuals at higher risk for lawsuits due to their position or wealth.

Cheaper Risk: When it doesn’t require you to max your primary coverage upfront, umbrella insurance is almost always more affordable than a limit increase on your auto or homeowners insurance. This cheaper risk pricing makes it a good option for anyone who qualifies and wants the extra coverage at a closer-to-risk-adjusted cost.

A historical aside: It wasn’t until the 1960s that umbrella insurance policies began to be marketed and sold in the United States. The earliest policies provided excess liability coverage for individuals and families, covering incidents such as personal injury, property damage, and defamation. Although the audience stayed the same over the years (affluent people), the scope has since expanded to include things like “False arrest, Invasion of privacy, Libel, Slander” as core coverage concepts on the idea’s wikipedia page.

So, if you’re a founder or just a savvy information worker looking to have someone else think about your insurance, come optimize with Coverage Cat. Proper insurance can meaningfully affect your financial life. Let us prepare for you!

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