Protect Your Assets With an Excess Liability Policy
How confident are you that your personal assets will be protected in the event of an accident that results in a law suit? Unfortunately accidents do happen and often law suits result. Fortunately Excess Liability insurance (also called an umbrella policy) is a risk transfer tool created just for this scenario.
Excess Liability insurance is an individual policy written to protect your personal assets if you are sued due to an accident or accusations of libel/slander, and it also covers defense costs even if a lawsuit is groundless. This policy is triggered when the amount you must pay in a covered lawsuit exceeds the limits of liability under your primary insurance policies (i.e. homeowner’s automobile, watercraft). You and your family members are covered—worldwide.
Your Excess Liability policy can be triggered by a variety of types of accidents, and unfortunately accidents are more common than you may think. Some real life claims that resulted in million dollar law suits include:
- Your car skids on a rainy day and the passenger in the car you hit suffers a neck injury
- Your new television is delivered and the delivery person slips and falls on the steps to your home and breaks his leg
- A child jumps into the shallow end of your swimming pool and is severely injured
- You’re enjoying a day on your motor boat pulling someone on a wake board, and they collide with another boat
Law suits from any of these situations could be devastating financially without excess liability insurance. It’s also important to note that if you’re traveling and have an accident overseas which results in a law suit, your assets will still be protected.
When a significant life-changing event occurs, it’s especially important to have an excess liability policy. The following are some examples of events:
- Net worth increases and/or you have some type of a liquidity event i.e. you sell your company, inherit money, etc.
- Teenage child gets a driver’s license
- Swimming pool is installed
- Additional home is purchased
- Boat is purchased
When determining how much coverage you need, you should evaluate your assets that could potentially be at risk in the event of a lawsuit. We highly recommend that clients consult with their financial advisor or accountant to determine the appropriate amount of coverage. It’s also important to remember that future earnings can be attached in a judgment.
Excess liability insurance is cost effective, and dollar-for-dollar it’s well worth the peace of mind you’ll have knowing that you and your family members are covered—and that your current assets and future earnings are protected. To discuss your specific situation and explore the appropriate coverage for you, contact Kerry K. Tyrrell, CIC– Director, Private Client Group, 781-726-7126 or firstname.lastname@example.org.
Kerry is the Director of the Private Client group. She brings over twenty years of experience to the firm, working with high net worth individuals and their wealth management advisors. Kerry’s strengths lie in her knowledge of products and best in class personal service.