Your college-age child sends a libelous e-mail and is sued. You serve on the board of directors of a non-profit organization and a disgruntled employee sues management and each board member over a wrongful termination claim. Would you be personally liable? Personal liability in our increasingly litigious society is often an underappreciated risk to your wealth that needs to be managed as part of your asset protection plan.
The most common personal liability risk management strategy is transference using personal umbrella liability insurance. Umbrella policies are not just for the wealthy — they are for anyone who has assets that might be at risk if they are held responsible for a serious accident. It is a separate liability insurance policy that supplements the liability coverage of both your homeowners and automobile insurance policies.
Personal liability insurance offers coverage not found in your auto and homeowners policies, including false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, or eviction. Certain umbrella policies also provide coverage if you face liability arising from your service on the board of a civic, charitable, or religious organization
Even if a lawsuit is frivolous, you still face the expense of defending yourself and your liability policy would pay for your legal and defense costs. However, an umbrella policy does not cover claims arising from a business endeavor. If you own a business, you'll need to buy a separate business liability insurance policy.
As part of the Wealthcare planning process, we will evaluate the adequacy of your current personal liability program and would refer you to a qualified insurance professional to write the supplemental liability policy if necessary.
