The excerpt and link below are from a great article on liability insurance and why so many affluent people are under-insured and exposed. I write on this topic myself extensively and I warn clients like this:
Buy as much liability insurance as you can afford, assume it won’t work, apply or be sufficient and have a solid back-up plan. If for no other reason I want to see the insurance there to catch the bullet on the legal defense fees, which on their own can be devastating.
“Liability”—the responsibility for injury, death or damages to another—is a word that sends chills down people’s spines. Anyone who owns a home, drives a vehicle, operates a business or engages in any number of normal pursuits faces liability exposure.
If one is proved liable for an accident, the consequences can be devastating financially unless you are properly protected. Wealthy individuals face a disproportionate amount of exposure because they often own multiple homes and automobiles, investment properties, private aircraft and yachts.
Wealth management professionals are getting better at including property and casualty specialists in their practices to address such liability exposure, yet statistics show that many high-net-worth individuals still carry low liability coverage in their personal insurance. Why do successful people do this when it obviously puts their wealth at risk?
SEE THE ENTIRE ARTICLE HERE: http://tinyurl.com/mrcef3