If you run a business in Illinois—whether in construction, real estate, or healthcare—you face major risks. One serious lawsuit could wipe out your savings or shut down your operations. That’s where Illinois umbrella insurance helps. It gives you extra protection when your regular policies aren’t enough.
This guide explains who needs coverage, what it protects, how much it costs, and how claims work in Illinois.
Who Needs Umbrella Coverage in Illinois?
Umbrella insurance coverage is not required by Illinois law. But if you want extra liability protection, your insurer will require certain minimum policies first.
Common base policy minimums vary by insurer but typically include:
Auto insurance: At least $100,000 per person / $300,000 per accident
Homeowners insurance: $300,000 in personal liability coverage
The Illinois Department of Insurance (IDOI) regulates insurers and handles consumer complaints. Even though umbrella insurance is optional by law, it’s often needed for business contracts, rental agreements, or loan approvals.
Who should consider it?
Contractors: Construction jobs carry significant risk. Umbrella policies protect you when basic general liability runs out.
Healthcare providers: Malpractice coverage helps—but lawsuits can still go higher.
Landlords and property owners: One injury on your property could bring a huge claim.
Professionals: Realtors, accountants, and consultants face legal risks from clients and contracts.
Learn more about the essential insurance policies contractors need in our full guide here.
What Does Illinois Umbrella Insurance Cover?
Umbrella insurance adds a safety net when your main policies hit their limit. Here’s what it includes:
Extra liability coverage: If your auto or home policy pays out $300,000, and you owe $1 million, the umbrella covers the rest (up to your limit).
Legal defense: Covers attorney costs, court fees, and settlements—even if you’re found not at fault.
Uncommon claims: Covers slander, libel, false arrest, and eviction lawsuits that regular policies exclude.
Worldwide coverage: Protection follows you anywhere—even overseas.
Common Risks for Illinois Business Owners
Umbrella claims in Illinois happen more often than most expect. Here are real situations where this extra coverage helps:
Car accidents: An employee causes a crash in a company vehicle. Medical costs reach $700,000—but your commercial auto policy only covers $300,000.
Injury on your property: A customer slips on an icy sidewalk. The claim reaches seven figures because of surgery and lost income.
Lawsuits over online reviews: A vendor sues your company for defamation. Your general liability doesn’t cover it—but your umbrella might.
Illinois Umbrella Insurance Cost Factors
Cost factors:
Number of homes, vehicles, or rental units you own
Driving history (yours and your employees’)
Recreational risks (pools, ATVs, etc.)
Claims history
ZIP code (urban areas = higher risk)
Higher base coverage = lower umbrella premium
How to File a Claim Under Illinois Umbrella Policies
If you’re involved in an accident or legal claim:
Tell your insurer right away
Submit medical bills, police reports, or photos
Cooperate with their investigation
Answer calls and letters quickly
Under Section 154.6 of the Illinois Insurance Code (215 ILCS 5/154.6), insurers are legally obligated to handle claims in good faith, which includes investigating and paying valid claims in a timely manner.
If there’s a dispute, you can file a complaint with the IDOI. The Department will investigate complaints to ensure companies follow Illinois insurance laws and policy terms.
Final Thoughts: Should You Get an Umbrella Policy?
If you own a business, rental property, or expensive assets—you probably should.
Here’s why:
One major lawsuit can wipe out your savings
Base coverage is often too low to cover real-world risks
Umbrella insurance is cost effective but powerful
Many lenders and contracts require it
What to do next:
Review your current policies
Check if you meet the required base coverage
Add umbrella protection before something happens
Have questions or want a fast quote?
Call 855-718-7552
