The American Kennel Club (AKC) does allow this hernia to be surgically corrected and the dog can still show. The other types of hernias (Inguinal, scrotal or perineal) may not be surgical corrected and still show in AKC conformation.
A companion pet owner need not be alarmed if their new Cavalier King Charles Spaniel puppy does have an umbilical hernia. It can easily be corrected during the spay/neuter process or just left as is since majority of the time they pose no threat to the dog. In the unlikely event where an umbilical hernia becomes painful to the touch, red or swollen, take your dog to be examined by a veterinarian as soon as possible.
Keep in mind that umbilical hernias can appear on many different breeds of dogs. Most Cavalier King Charles Spaniel breeders will inform buyers of the condition prior to placement.
An umilical hernia does not lower the value of a Cavalier King Charles Spaniel puppy since it is so common in the breed and a very minor health issue easily correctable.