If you or your family are financially successful, you know you can’t afford to cut corners when it comes to protecting your wealth. Your assets and unique lifestyle often create a greater number of liability risks. And by this, I mean maybe you own multiple homes, have properties held in trusts or LLCs, employ domestic staff, or more. All of these are important factors when considering how to establish the right Personal Excess Liability insurance that best supports your financial plan.
Why do I bring up this topic today? Well, lawsuits are one of the biggest threats to a person’s portfolio, and the effects can be financially devastating, even for those who are financially well off.
Liability Lawsuit Protection Options to Consider
So, what are some important factors for you to consider as you navigate risk management buying decisions, taking into consideration personal liability?
Find the Right Personal Excess Liability Insurance Limit
The “right” limit tends to be different for everyone depending on your unique circumstances. Knowing your current net worth is a good place to begin when determining “how much” of limit to get. But do note, it’s important to be aware that a court is able to attach future earnings to a settlement, which means personal liability not only puts your current assets, but also your future assets, at risk.
Add Uninsured Motorist/Underinsured Motorist Coverage
The Insurance Research Council estimates that 1 in 8 drivers on the road are not insured. Having Uninsured Motorist (UM) or Underinsured Motorist (UIM) coverage is a great way to protect yourself from the “other guys.” This benefit is often viewed like a disability policy. It helps protect you or your family if you’re injured, as well as protects you from any lost wages, pain and suffering, or other items and issues you or your family members may endure.
Add Employment Practice Liability Protection
If you employ domestic staff, adding Employment Practice Liability (EPLI) will be important. EPLI helps protect you from a lawsuit brought on by a nanny, chef, gardener, or any other domestic staff employee who may claim their legal rights have been violated.
Don’t Forget about Not-for-Profit Activity Risks
Board members can be held liable for the actions or inactions of the organizations they serve, including accusations such as wrongful termination and breach of fiduciary duties. Often overlooked and not brought up by most risk advisors, keep Directors & Officers Liability coverage top of mind. This coverage can provide you with even greater protection.
Other Potential Personal Liability Risks
There are countless other sources of risk you may face that can lead to a liability lawsuit, but it’s important to remember how some of these common activities and exposures increase risk:
- Teenage drivers
- Social media use
- Home swimming pools
- Home entertaining
- Executive or leadership level title
Understanding that many standard and direct markets do not have the appetite for a lot of these types of exposures and cap their limit to $5 million, you can see how financially successful families and individuals can quickly outgrow their program they’ve been with for years.
At Holmes Murphy, our top carrier relationships can help shield your legacy with limits up to $50 million as well as by adding different optional coverages for precise circumstances.
If you’re interested in learning more or want to talk about all the coverages available, don’t hesitate to reach out to us! We have a team dedicated to the Private Risk space and would be more than happy to chat with you.
