When consulting with a client on their umbrella policy (also known as excess liability) the question of “How much insurance do I need?” ALWAYS comes up. It is a tough question but the answer is: always more than you may think!
I have seen and used formulas that add up an individual or family’s net assets then subtract the liability coverage currently in force. If you have a positive number you are underinsured. That formula also doesn’t account for a key factor: future earnings. In the event of a claim, while most likely catastrophic, your future income could be garnished up to 40% to help pay off a court ordered award.
This type of situation – while admittedly rare – is easily avoided by proper insurance coverage.
From a boating accident to a case of libel via social media you want to have enough coverage.
Purchasing an umbrella is a very low cost for the limits of insurance offered. One of the underutilized insurance products offered is Group Personal Excess. This is an umbrella coverage purchased either by a company or through a company. These plans can offer very high limits and reduced underwriting paperwork. Groups over 25 do not need to fill out any underwriting material to get coverage. This can be extremely advantageous for an executive who may have a few too many speeding tickets, or worse, children that do… As far as the cost – the discounts have been as much as 80% off of the cost of an individual policy. To insurance savvy firms, this product has been a great addition to the firms benefit package.
If interested in learning more about an umbrella or group personal excess please contact Chip Gibson.