At what dollar amount would you be comfortable liquidating tangible assets to comply with a legal judgement in the event you are sued? This may be a difficult question to answer. Within our litigious society, peace of mind can be hard to find. The potential for involvement in a third-party incident can happen when least expected. It may not be top of mind to review excess liability policy limits and how they align or don’t align, with one’s personal net worth. The best line of defense is knowing how you may be exposed and being properly protected by the coverage you have in place.
Motorcycle Accident in the state of South Carolina– While traveling through an intersection, a motorcyclist was hit by an oncoming vehicle that failed to stop at a red light. The accident was fatal. The family sought damages for wrongful death and both compensatory and punitive damages . $50,000,000 Settlement
Dog Bite in the state of Florida- While taking out the trash, a man was attacked by 3 dogs owned by his neighbor that escaped their fenced yard. The man sustained multiple lacerations and a lower back injury – $7,700,000 Settlement
Bodily Injury in the state of New York- A heating and cooling technician sustained injuries after falling through the floor of a customer’s attic. After a fall of nearly 20 feet, the homeowner was liability for the injuries to his back, hand, foot, ribs, shoulder and wrist– $8,900,000 Settlement
Although insurance documents are typically gathered from the negligent party during the discovery period of litigation, there are several factors that are considered when judgements are calculated:
An Excess Liability policy can differ from an Umbrella Liability Policy. It is always important to read over the insurance contract or ask your agent to confirm which policy you are purchasing. Historically, Excess Liability policies were deemed a ‘follow-form’ policy which means coverage provided is only in excess of coverages that are not excluded in the underlying policies. In other words, Excess Liability terms, coverages, and exclusions would mirror those included in your home or automobile policies.
In certain scenarios, a “true” Umbrella policy includes its own insuring agreement and may provide alternate coverages that the underlying policies do not. For example, new exclusions may apply or there may be broader coverage offered (e.g. rented auto coverage or worldwide liability). The policy language can vary by insurance carrier and may use the names interchangeably, so it is best to read over the contract to ensure your coverage. Learn more about How an Umbrella Policy can Provide Peace of Mind for Your Organization.
About the Author:
Note: This communication is for informational purposes only. Although every reasonable effort is made to present current and accurate information, Oswald makes no guarantees of any kind and cannot be held liable for any outdated or incorrect information. View our communications policy.