Umbrella Reinsurance

What Does Umbrella Reinsurance Mean?

Umbrella reinsurance is a reinsurance policy that protects the insured insurance company against all possible claims for which its other reinsurance policies do not provide coverage. In other words, an umbrella reinsurance policy protects against all contingencies that its other policies may not cover.

Insuranceopedia Explains Umbrella Reinsurance

For example, if the insurance company has a separate reinsurance policy to cover only life and health policies, umbrella reinsurance would provide coverage to the company’s liability, property and other insurance policies.

Typically, umbrella reinsurance contracts involve one set of reinsurers who each take on a fixed percentage of the risk so that in the event of a catastrophic loss, no one reinsurer has to assume the entire loss and potentially risk becoming financially insolvent