Umbrella Insurance for Apartment Buildings: Do You Need It?

Jan 7
2 min read

Apartment buildings carry higher liability exposure than single-family rentals. Multiple tenants, shared spaces, and frequent visitors increase the risk of serious lawsuits. While apartment insurance includes liability coverage, limits may not be enough after a major claim.

That’s where umbrella insurance for apartment buildings comes in.

What Is Umbrella Insurance for Apartment Buildings?

Umbrella insurance provides additional liability coverage on top of your underlying apartment insurance policies, including:

Apartment property liability insurance
General liability coverage
Auto liability (if applicable)

Once your base apartment insurance limits are exhausted, umbrella insurance steps in to cover the remaining costs.

The Insurance Information Institute explains that umbrella policies are designed to protect against catastrophic liability losses.

Why Apartment Buildings Face Higher Liability Risk

Apartment owners face increased liability exposure due to:

Slip-and-fall accidents in common areas
Dog bites or tenant-related injuries
Fire or water damage impacting multiple units
Lawsuits exceeding standard apartment insurance limits

According to the National Apartment Association, shared spaces and high occupancy significantly raise liability risk.

What Umbrella Insurance Typically Covers

Umbrella insurance for apartment buildings can help cover:

Bodily injury claims exceeding apartment insurance limits
Legal defense costs
Property damage liability
Certain personal injury claims, such as libel or slander

This added protection can be critical when lawsuits exceed $1 million—an amount increasingly common in serious injury cases.

What Umbrella Insurance Does NOT Cover

Umbrella insurance generally does not cover:

Property damage to your own building
Tenant belongings
Intentional acts
Claims excluded under your underlying apartment insurance

It’s important that your base apartment insurance policies meet minimum liability limits required by the umbrella carrier.

How Much Umbrella Insurance Do Apartment Owners Need?

The right umbrella limit depends on:

Number of units
Property location
Amenities (pools, gyms, playgrounds)
Claim history

Many apartment owners carry $1 million to $5 million in umbrella insurance, though larger properties may need more.

Why Umbrella Insurance Complements Apartment Insurance

Umbrella insurance is not a replacement—it’s an extension of your apartment insurance liability coverage. Without it, a single large claim could:

Exceed policy limits
Put personal or business assets at risk
Impact long-term insurability

For an overview of liability risks and limits, the International Risk Management Institute offers in-depth educational resources.

How Wexford Insurance Can Help

At Wexford Insurance, we help apartment owners evaluate liability exposure and structure apartment insurance and umbrella policies that work together seamlessly.

We ensure: