Accidents occur every day where someone is injured or property is damaged. Most occur because someone was careless, not because they intended for it to occur. If there is physical, emotional, physical and/or financial harm, a lawsuit may result against the owner, operator or whomever may have contributed to the accident.  The number and financial results in lawsuits are on the rise across the country.  

What can you do to be sure you are well protected?  Examine the liability limits in your insurance program!  

Umbrella or excess liability is a higher limit available to families and businesses to protect their assets against larger lawsuits and provide legal costs above liability limits on your basic insurance policies.  We at Magis Insurance Group like to remind clients that you should consider potential risk that can result from:

• everything you own or lease – property, autos, equipment, land, recreational items…
• everything you do – drive, participate in recreation, maintain property, work, volunteer…
• whenever you hire others to work on your behalf – your actions and their work can be your responsibility… 
• everything you sign – many contracts and agreements contain legally binding responsibility of the parties involved…
• entities for which you are responsible – LLCs, corporations, trusts, while they are separate from your personally still have potential risks to the assets of the entities and its ongoing work…

So, if someone is injured, has property damaged, or suffers a financial loss, there could be a lawsuit with a demand for damages.  You have to respond to the suit, and if covered by insurance, you forward the lawsuit to your insurer, who appoints legal counsel to respond and defend the lawsuit.  If your policy covers the situation according to the terms and conditions, that legal representation lasts as long as the limit does.  If the limit is met, the insurer will cease to pay for legal costs as well.    

SOME FACTS – 

A common question is “what limit is sufficient for my situation”?  Our response is if you can tell us all of the details of the incident, who was injured and to what degree, we may be able to give you guidance.  Unfortunately, no one has that crystal ball.  As such, you should look at the degree of risk you have based on what you own, drive, operate, participate in, etc. and the assets you have that could be attached to satisfy the financial settlement of a lawsuit if whatever insurance limit you have is exceeded.  The more assets you have, the more you are at risk for out-of-pocket expenses. Just because your insurance limits are met doesn’t mean the claimant won’t attach other assets to satisfy the settlement.  Bottom line – you should understand what you have at risk! 

SOME STATS – 

$21 million Georgia jury award – A pedestrian was walking on the shoulder of a highway as he had run out of gas. A truck drifted from its lane, crossed the edge of the paved road and lost control.  The accident caused the death of the pedestrian. 

$2,797,000 NY jury award – The operator of a motor scooter was struck by a car attempting to make a right turn on the same side of the street. The driver of the motor scooter died four days later of his injuries.  

$1,000,000 FL settlement – A family hosts a birthday pool party for their five-year-old. They hire two lifeguards to watch the children and their families swim. The grandfather of one of the invitees suffers a heart attach while swimming and is submerged for two minutes. He could not be resuscitated. The man’s family alleged that the lifeguards were not certified and the pool was so cloudy the man was not visible when submerged. There was a settlement before trial of $1 million, the defendant’s insurance policy limit. 

$2,750,000 CA award – A friend of a homeowner was descending a staircase on their deck when his pants were caught on a nail that was projecting out.  It was established the nail has existed for a prolonged period. There were injuries to his spine and shoulder that required multiple surgeries.  

$10,700,000 CA verdict – A 15-year-old was a passenger on a jet ski operated by another teenager when it collided with another watercraft. The passenger was left with permanent brain damage.  The award was split between the responsible parties, the owner of the jet ski and the owner and operator of the other boat.  

As you can see, many larger awards are not exotic “McDonald’s hot coffee cases” but ordinary activities gone awry that caused significant injury, need for medical treatment, and in some cases, loss of earning capacity.  

SOME STEPS TO TAKE – 

• If you don’t have an umbrella, consider if you should.  They start with limits of $1 million and can go up to $25 million + depending on the insurer. 
• If you have an umbrella, do you know the limit?  If not, find out and assess if it is right for you.
• If you have an umbrella that covers multiple people, legal entities, LLCs, trusts, realize all of those insured share the same limit.  If multiple insureds are named in a lawsuit, a settlement from several could reduce the limit more than you think.

Understand that factors such as your underlying liability insurance policies and limits, previous lawsuits, accidents and driving records, among other factors can affect the availability and pricing of liability insurance. 

If you are unsure of your needs and wish to discuss in more detail, call us.  It is what Magis is here for… to do more to protect your assets!