It covers liabilities above the coverage amounts and some other none home/ car type stuff like libel.
So if I have 500,000 liability coverage, and I have a 2 million umbrella, it covers us if sued for more than the 500,000 limit.
She wants it because we have a pond in the backyard and tons of kids of neighbors that won't stop playing in our backyard. We initially got it to cover if our son was sued driving our car and because renters at our rental house put up a pool, that we expressly told them not to, and were worried they'd sue us for trying to evict them or if someone drowned in it, we'd have been liable.