I advise many of our clients on their personal risk management and insurance issues. An often overlooked area is a family’s Personal Umbrella coverage and limit.
No one wants to think of the awful things that could potentially happen where they could be held responsible. It is often recognized that people who have a teen driver, “mean” dog or swimming pool at home carry a higher than average liability risk but it doesn’t end there. Some risks are less obvious and can often give rise to personal liability that is completely unexpected:
- Serving on a community boards where your comments are misconstrued as slander and suite is brought;
- Signing a seemingly benign “common” contract – As an example, a couple signed a wedding reception contract which contained a restaurant requirement that the bride and groom defend and pay judgments against the restaurant even if caused by the negligence of the restaurant. When 50 of their guests got seriously ill from food poisoning, they were held liable. Anything can happen, and even frivolous claims can result in thousands for defense costs!
A properly constructed Personal Risk Management program will include a robust personal umbrella that covers over a family’s existing insurance for automobile, homeowners liability, watercraft, RV’s etc. We would suggest limits of at least $5 million (often much higher is appropriate and available). The cost is generally nominal for the protection afforded and, in our opinion, it is a critical purchase for any person. Care should be taken to avoid coverage gaps between the underlying policies and the umbrella. Buyers should also be mindful of any unannounced reductions in coverage at renewal.
Prospectively reducing our clients exposure to risk does not end with our commercial advice and often the lines between business and personal are blurred. Take a moment, pull out your personal lines policies and follow along with us in reviewing important items to avoid unexpected liability from a “freak” event.
Please feel free to contact us if you have any questions we would be happy to help navigate through this area with you.
