Bumbershoot insurance is a specialized form of umbrella liability insurance used primarily in the maritime and transportation industries. It provides additional liability coverage above the limits of one or more underlying marine or transportation insurance policies. Depending on the policy terms, it may also cover some liability risks that the underlying policies exclude. Shipping companies, port operators, logistics providers, and other maritime businesses commonly purchase bumbershoot insurance to protect against unusually large liability claims.
Example: A shipping company has separate marine liability and employers’ liability policies. If a major claim exceeds the limit of one of those policies, the bumbershoot policy may pay the additional covered amount, subject to its terms and limits.
Note on the name: “Bumbershoot” is a North American insurance term, derived from an old slang word for umbrella. Elsewhere, insurers more commonly refer to marine umbrella liability or marine excess liability insurance.
See also: Umbrella Insurance, Excess Insurance, Underlying Policy.