Final answer:
K's personal umbrella liability policy will respond to the suit brought against them by the local business, providing coverage beyond the limit of the homeowners policy. It will cover the additional amount beyond the $200,000 limit, up to the $1 million limit of the umbrella policy, if damages are awarded to the business.
Step-by-step explanation:
K's personal umbrella liability policy will respond to the suit brought against them by the local business. The personal umbrella liability policy provides coverage in excess of the limits of the underlying homeowners policy. In this case, since the homeowners policy has a $200,000 limit of personal liability, the personal umbrella liability policy with a $1 million limit will kick in to provide additional coverage.
In the event that the claim is successful and damages are awarded to the local business, the personal umbrella liability policy will cover the additional amount beyond the $200,000 limit of the homeowners policy, up to the $1 million limit of the umbrella policy. This means that if the damages awarded to the business exceed $200,000, the personal umbrella liability policy will provide coverage for the remaining amount, up to $1 million.
It's important for K to understand the terms and conditions of their personal umbrella liability policy, as well as any exclusions or limitations that may apply. They should consult their insurance policy documents or contact their insurance provider for specific details regarding coverage.