Authors: Laila Brabander Frank Godfrey
Given the dramatic rise in both litigation and damage awards over the past few years, excess liability insurance has become an integral piece of our clients' wealth preservation strategy. Our advisors provide an extensive review of excess and umbrella coverages to ensure our clients are protected in the unfortunate event that they or a family member is named as a defendant in a lawsuit.
As the holiday season approaches, and more people are on the road, auto liability is likely top of mind — but one need only look at recent headlines to see large liability damage awards against wealthy individuals associated with watercraft, dog bites, entertaining at home and vacationing — even Gwyneth Paltrow wasn't immune to a liability claim following a skiing accident.
Wealth preservation
For our clients, insurance as wealth preservation is intended to cover significant losses. Litigation claims have redefined what we deem significant in personal insurance. Jeffrey L. O'Hara — a partner at Connell Foley who has litigated close to 100 trials with 68 jury verdicts and has represented some of our wealthiest clients — describes excess liability insurance as a "complete barrier insulating you and your family from your outside activities. You cannot leave gaps if you are seeking full protection."
Large damage awards that were once commonplace in commercial trucking, product liability and medical malpractice cases have now migrated towards personal liability cases due, in part, to plaintiff counsel tactics and the rise of non-economic damages, such as post-traumatic stress disorder. As O'Hara states, $10M has become a "rounding error" in personal injury litigation. Representation by strong counsel is key, and coverage for these defense costs outside the policy limits is a fundamental part of a liability policy.
O'Hara continues "our clients must have confidence that we are well prepared, impeccably skilled and fully equipped to guide them on this harrowing path. It is our job to give them comfort and allow them to sleep at night knowing we will put their best foot forward honorably and ethically."
Appropriate limits
Frank Godfrey, managing director in Gallagher's New York office specializing in insurance for ultra-high-net-worth individuals, reflects on the changes he's seen in the past decade: "10 years ago, $5 to $10M in excess insurance was the norm and was a simple addon and usually cost about $100 per million. Now we are putting together $20M to $100M towers of insurance for our clients akin to what they have on the commercial side and rates have skyrocketed given the rise in claims."
When it comes to liability insurance, we know your situation remains unique. So we ask questions. We listen. We seek to understand. And we repeat the process — not until we merely think we grasp your needs, but until you're certain that we do. Because we know your current security and future happiness depends on it.
Contact us for a review of your excess liability limits to ensure the appropriate protection of your wealth.
Learn more about your exposures and get an estimate for your excess liability coverage.
