Breaking Down Personal Liability Insurance

Personal liability risk continues to evolve in response to changes in the law and societal attitudes. No matter how careful you are, there’s no way to predict what life may throw at you. Liability coverage provided within your homeowners, auto, and boat policies is considered primary insurance and responds first in the event of a claim. Personal excess liability (or umbrella) insurance responds after primary coverage limits are exceeded.

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Personal excess liability insurance has high coverage limits that can provide you with worldwide liability protection with features such as excess uninsured/underinsured motorist coverage, not-for-profit board liability coverage, employment practices liability insurance, and shadow defense costs. As an affluent  individual, you must maintain a greater awareness of shifting dangers and seek expert advice to develop a comprehensive plan to protect your assets, future wealth, reputation, and lifestyle.

Here are a few of our suggestions

  • The agency should have a well-defined process for periodically reviewing your physical assets such as your home and your car, your financial assets (both current assets and future earning potential), and your lifestyle – only a combination of understanding these three aspects can accurately assess your level of liability risk.

  • Resist the temptation to choose a carrier based on price alone. Your advisor should be able to help you understand the value of a carrier based on coverage, financial stability, and service quality.

  • Ensure that the liability components of your auto, home, watercraft, umbrella, and other personal insurance policies work together as a seamless plan; making sure there are no gaps in coverage.

  • Purchase the level of coverage to meet extreme cases, not the likely cases – liability settlements and verdicts can exceed $20 million.

  • Make sure your advisor knows if you employ household staff – you may need workers compensation and employment practices liability insurance (EPLI) as part of your policy.

The more complex your lifestyle, the greater the chance of the unexpected coming your way. Personal excess liability insurance can protect your assets from unforeseen accidents and mishaps that simply may be out of your control.  Having the proper liability protection in place can give you the peace of mind to enjoy the fruits of your labor and the people that mean the most to you.


About the Author

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Katie Dierks is a Certified Personal Risk Manager who specializes in liability protection for successful individuals.  She takes a holistic approach in designing an insurance program that mitigates the potential threats to her client’s assets and lifestyles. | Connect on LinkedIn