Umbrella insurance protects all items of economic value and future income. It is also known as a type of liability insurance. A liability is a legal debt or obligation. The umbrella refers to how the policy shields insured assets. It covers damages caused by you and your dependents. People who have large sums of money usually have this type of insurance because they have high premiums. Premiums are the total cost of the policy. It guarantees you higher liability limits. It provides additional limits of coverage if you are at risk of being sued.