Sunday, November 7th, 2010 at 8:18 am
Recent frivolous lawsuits and crazy settlements got people’s attention when a judge sued a little, family-owned dry cleaners for $65 million because they lost a pair of his pants. NERA Economic Consulting showed a survey determining that small businesses pay an average of 69 percent of civil lawsuit liability expenses, though they generate only 19 percent of business revenues.
Not a small company owner or big business administrator? You can possibly still deal with great loss of assets from damages and court expenses in a liability claim. You obtain some protection from your homeowners, renters and auto insurance, but every policy has limitations and your policies could leave you exposed where you least expect it.
Umbrella policies give more, overall coverage past these specific policies. Commonly, amounts go from $1 million to $5 million and usually cover losses more then your other policies. The coverage goes with you where you go because it is not tired to your vehicle or property. Typically, it doesn’t cover business activities, even if the business is operated from your home.
Your requirement for personal liability insurance relies on two factors: the total amount of assets you have and the risks associated with your lifestyle. Does your property have a pool? Is hunting on your farm or ranch allowed? Is there a nanny or housekeeper employed at your house? All of those factors make you more vulnerable to risks past the scope of a typical homeowners policy.
Do other factors make you a bulls eye for lawsuits? Even trivial claims can cost you in time and perceptual distress. Any public knowledge about your assets, family inheritance, land holdings, winning the lottery or income – or even assumptions about these certain things – could bring out claims to more elaborate tricks.
Commonly, umbrella liability coverage extends to your spouse, your children and relatives that also live in your house, under your care or being cared for by someone living with you. That can be a comforting reassurance when you have teenagers driving or college students living away from home.
Umbrella liability insurance can secure what you’ve saved up. Your financial advisor or insurance professional can assist you with examining your current coverages and potential risks to determine how big your umbrella should be.
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