DEFINITION of 'Bumbershoot Policy'
A specialized form of liability insurance. A bumbershoot policy is a type of umbrella coverage designed specifically to insure marine risks, but it can also include non-marine risks. Shipyards often use this type of policy, which provides protection and indemnity coverage as well as liability protection under the Longshoreman and Harbor Workers' Act.
BREAKING DOWN 'Bumbershoot Policy'
The word bumbershoot literally means "umbrella". Hence the name for this type of policy, which is intended to cover all miscellaneous forms of liability just as a standard umbrella policy does for individuals or businesses. Bumbershoot policies can also provide insurance for collision and salvage expenses.