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A neighbor slips and falls on your sidewalk, a child finds his way to your gated pool and drowns, your teenage son causes a car accident or you sit on the board of a nonprofit organization, creating yet another outlet for people to target your personal wealth. All of these factors could result in a devastating lawsuit. And the more you have, the more you have to lose. “With newspaper headlines commonly showing jury awards ranging into eight figures, excess insurance is designed to protect individuals from lawsuits,” says Chris Heidrick, vice president of Fireman’s Fund Personal Insurance. Excess insurance, sometimes referred to as umbrella coverage, goes beyond regular homeowner’s insurance to cover large jury awards. Fireman’s Fund recently launched its Prestige Excess coverage, with limits of $1 million to $100 million. While it’s the affluent who are generally concerned about excess insurance coverage, Heidrick cautions that young professionals should also consider the coverage. “Often, a lawsuit targets not only someone’s current assets, but their future earnings as well,” Heidrick points out. “Young attorneys, physicians and business professionals should account for their lifestyles and potential earnings, and consider adding excess coverage to their insurance policies.” While financial assets are the primary target of most lawsuits, an individual’s reputation can be damaged as well. When looking at excess insurance options, this should be an important consideration. “Fireman’s Fund Prestige Excess policy includes up to $25,000 coverage for professional public relations counsel to manage reputational damage stemming from a lawsuit,” Heidrick explains. Today, it is not only the affluent who are targets of lawsuits; modern lawsuits are sophisticated enough to go after potential earnings, putting the “emerging affluent” individual at risk. It becomes very important for those who anticipate a large growth in income to protect it even before it is in the bank. Sidebar Quiz Should You Consider Excess Insurance? Take this quiz to find out. 1) Do you have assets over $1 million, including property, cars and other vehicles, and income? 2) Do you have the potential to have assets over $1 million in the future? 3) Do you have a swimming pool? 4) Do you have dependent children who are of driving age? 5) Do you employ one or more people in your home or business? 6) Are you a director or officer for a nonprofit? 7) Do you manage a family trust? 8) Do you want to make sure your current assets and future earnings are protected? If you answered “yes” to any of these questions, you should consider an excess insurance policy. Discuss excess coverage with your accountant, financial advisor or independent insurance agent. |
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