Encino, Calif. (May 3, 2010) – There's no question that Americans live in a litigious society. Everyday people are sued over a wide assortment of things, from auto accidents to loud parties. World famous wrestler Hulk Hogan recently made news for blaming his insurance agent when his carrier did not provide enough coverage after his son was involved in a serious car accident. While the case has not yet gone to court, it brings up important points about personal liability coverage for anyone with substantial net worth or a high profile lifestyle.
"There's a feeling that additional liability policies are too expensive or too complicated for anyone but the super wealthy", says Timothy Gaspar, owner of Gaspar Insurance Services in Los Angeles. "Actually, anyone with high risk factors should think about increasing their liability coverage. For most people, the cost of securing an "umbrella policy" to protect themselves is relatively low."
Gaspar offers some key topics to focus on when considering an umbrella policy:
1. Appearances Matter: Even those who do not consider themselves wealthy need to consider appearances to the outside world. A home, neighborhood or car can give the appearance of being well-to-do and increase the risk of a lawsuit if there's an incident.
2. On the Road: Spend much time on the road? Are there a large number of drivers in your household? Even with a clean driving record, the odds of an auto accident increase proportionally the more miles a car spends on the road each year. Auto insurance will cover most claims, but if a lawsuit exceeds the limit of a policy, the driver can be held responsible for paying the settlement.
3. Home Base: Most business owners don't realize that home-based businesses where clients visit on a regular basis are not covered by homeowners policies if someone is injured on the property. This also applies to people who throw parties and fundraisers at home - large numbers of people combined with alcohol can be trouble, so an umbrella policy is key to maximize protection.
4. Don't you know who I am?: Celebrities and those in the public eye (including CEOs and politicians) are often exposed to increased liability because of their fame. Board members and top level executives can be the target of class action lawsuits or personal attacks should the business fail to turn a profit or should someone be injured on company property. Often corporations will purchase umbrella policies to cover executives and VIPs for just this reason.
"The scary thing about a liability lawsuit is that there's no clear end in sight," says Gaspar. "If a case is decided against you, the court can go after your home, your savings, your art collection, real estate investments, everything you have. Talk to your insurance agent...