Don’t underestimate the threat of personal liability lawsuits
The Globe and Mail – By Chris Atchison
A Muskoka cottage, a boat or two and a few luxury cars, plus the globetrotting résumé that comes with them. It’s an enviable lifestyle to many, but one that also invites risk.
The higher profile of most high-net-worth people, and the ease of acquiring information about practically anyone these days, makes them a target for litigation.
Let’s say you’re in an auto accident and you injure someone.
“Your auto insurance policy covers you to a certain amount,” says Karen Ritchie, senior vice-president at Baird MacGregor Insurance Brokers LP in Toronto. “But it’s not hard to find out about people nowadays by Googling them. They might find out you’re a senior executive, for example, and the amount of the lawsuit goes up.”
Even frivolous lawsuits can result in settlements in an effort to keep a case out of the courts.
Wealthy people need ample liability insurance, and specifically a personal liability umbrella policy that provides coverage over and above that offered by a home or auto policy, experts advise.
Many high-net-worth individuals fail to recognize the threat to their personal wealth, leaving them exposed to lawsuits for everything from libel and slander to property damage and personal injury.
“Typically, [buying adequate liability insurance] is very low on their priority list,” says Ian Black, a financial advisor with the Vancouver-based wealth planning firm Macdonald, Shymko & Co. Ltd. “ It’s not even on most people’s radar screen for a variety of reasons.
