If you run a business in Arkansas, your general liability or auto policy may not be enough. From deadly tornadoes to high-cost lawsuits, risks here run deep. One claim can go well beyond your basic coverage.
Arkansas umbrella insurance adds a powerful extra layer of protection. Whether you’re a contractor, doctor, or landlord, this guide explains who needs umbrella coverage, what it includes, how much it costs, and how it’s regulated in Arkansas.
WHO NEEDS THIS COVERAGE IN ARKANSAS?
Umbrella insurance isn’t required by law in Arkansas, but it’s strongly recommended.
High-risk industries should not skip excess liability coverage:
Construction Firms – Equipment accidents, jobsite injuries, and vehicle collisions can push lawsuits past general liability limits
Medical Providers – Malpractice payouts can top $3 million. Umbrella coverage bridges that gap
Professional Services – Mistakes by lawyers, accountants, or consultants often lead to costly legal action
Many contracts, lenders, and clients require umbrella coverage before they’ll sign. Even if it’s not legally required, it’s often expected.
To qualify, your base liability policies must meet minimum thresholds. Arkansas requires auto insurance of at least 25/50/25 ($25K per person / $50K per accident / $25K property damage). Most umbrella insurers require higher base limits—typically at least $250K/$500K—to apply.
COVERAGE TYPES AND KEY BENEFITS
Umbrella insurance is regulated by the Arkansas Insurance Department (AID) under Title 23 of the Arkansas Code. These policies protect businesses from lawsuits and liability gaps after your standard policy caps out.
What does an umbrella policy include?
Excess Liability Coverage – Adds $1M to $10M in protection above your base policy
Legal Defense – Pays attorney fees and court costs even if you’re not found liable
Personal Injury Protection – Covers libel, slander, or invasion of privacy lawsuits
Worldwide Incidents – Protects your business if something happens outside the U.S.
Learn more about the essential insurance policies contractors need in our full guide here.
REAL-WORLD RISKS AND COMMON CLAIMS
Auto accidents are the top reason Arkansas businesses use umbrella coverage:
- A construction truck causes a multi-car wreck near Conway. Medical costs for multiple victims easily top $1 million
- A child drowns in an unfenced pool at a Hot Springs rental property. The landlord faces a lawsuit that exceeds homeowners limits
- Ice causes a customer to fall outside your Fayetteville shop. Medical bills and missed wages can add up fast
- Natural disasters make liability worse. In March 2023, a tornado in Wynne caused $150.5 million in damage. Claims included not just property—but injuries from falling debris and structural collapse.
- Flooding near Pine Bluff or hail damage around Little Rock can lead to lawsuits, not just repair bills.
HOW TO FILE A CLAIM
If disaster strikes, timing is everything. Follow these steps if you need to use your umbrella coverage:
Report the Incident Quickly – Contact both your main and umbrella insurers immediately
Document Everything – Photos, videos, and witness statements matter
Follow State Rules – Arkansas Insurance Department requires fair and timely investigations
Call for Help If Needed – You can contact AID directly if you face disputes or delays
Know the Penalties – Violating umbrella policy terms may lead to fines or license suspension
BOTTOM LINE FOR ARKANSAS BUSINESS OWNERS
One serious lawsuit could shut down your business overnight. But the right umbrella insurance can close that risk gap.
Here’s what to do now:
✔ Review your auto and general liability limits
✔ Consider Arkansas-specific risks like tornadoes or flooding
✔ Make sure coverage applies globally if you travel for work
✔ Compare options with licensed consultants today
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Or call us now at (855) 718-7552 to speak with an expert.
