Answer these nine questions to find out
The world is an unpredictable place. Despite our best efforts to protect ourselves from risk, a catastrophic financial loss could occur at any time. Your risk might be greater than you think, especially in our litigious society. An unfavorable legal judgment could exceed your savings and put future earnings and other assets at risk. By reviewing the following questions, you can gain a better understanding of your risk exposure and how to take measures to mitigate that risk.
- Are you an avid collector?
If you have expensive artwork and collectibles in your home, you need to ensure proper security measures to avoid theft of your prized possessions. It’s also important to confirm with your insurance agent that they are adequately covered to their full market value under your insurance policy. Be sure to display art pieces away from harmful household activity, direct sunlight, heat (above fireplace or near heat register or radiator) or smoke (from fireplace or tobacco use).
- Do you have children?
You may be financially responsible for some, or all, of the damages caused by the negligent or intentional acts of your minor, dependent children living at home. Exposures include driving the family car, letting a friend drive your car, having a party while you are out of town and bullying a minor online or in person. You are equally at risk if your children’s friends are injured in your home, on your property or while you are driving them to school or other activities, as it is possible that other parents may sue you. Are your assets and future income protected adequately?
- Are your children of driving age?
According to the AAA Foundation for Traffic Safety, teens have the highest crash rate of any group in the United States.¹ Your child could be responsible for an accident that causes injury or death to others. A third party could sue you directly if your child is still a dependent.
- Do you have a pet?
Some animal breeds are more likely to be aggressive and could bite or scratch one of your house guests or a service person entering your home. According to the American Veterinary Medical Association, there are approximately 4.5 million reported dog bites annually in the United States. An analysis of homeowners insurance data by the Insurance Information Institute found that the number of dog bite claims nationwide increased 18% from 2015 to 2016.² Pets can get nervous when strangers or a large group of people are around. Children may treat pets as if they are their own and not approach with caution or give the animal a chance to adapt or get to know the child. When you have visitors, keep pets inside their kennels or a closed room to prevent potentially aggressive behavior.
- Do you frequently entertain company at your residence?
According to the National Safety Council, 20.2 million Americans experienced an unintentional injury in the home that required aid from a medical professional in 2014.³ A guest in your home could trip and fall, get food poisoning or drink too much alcohol and cause an accident while driving home.
- Do you have a pool or trampoline?
Someone could get injured or drown in your pool or hurt themselves playing on your trampoline – even if you are not at home. Do you have enough liability insurance to cover extensive medical costs or a lawsuit?
- Do you utilize social media, blog or post reviews online?
A seemingly harmless post on Facebook, Twitter, YouTube, Yelp and other platforms could become grounds for a lawsuit. A person or company could sue you for libel, slander or defamation of character if you are not careful what you write online. Consult with your agent to determine the appropriate level of insurance for your specific needs. The Partners Group agency typically recommends your liability coverage is at least equal to your net worth to protect yourself from litigation. Having many social media accounts can also put you at greater risk of identity theft, so be sure to keep accounts private and create strong passwords, taking care to change them regularly.
- Do you employ domestic staff?
There are multiple risks from having employees in your home. They could sue you for harassment, wrongful termination or age discrimination. But you are also at risk of theft as they often have complete access to your home and valuables. Be sure to perform thorough background checks before hiring any domestic staff.
- Do you serve on a board of a nonprofit organization?
Serving on a nonprofit board puts you at greater liability risk. Not only could you be subject to litigation by employees but also by donors, beneficiaries, other directors/officers or government officials. In addition to the risks you could face from hiring practices, you could also be sued for wrongful acts, such as errors and omissions, mismanagement of funds, conflict of interest or breach of duty – even if the acts are alleged and not actual. Does your personal liability policy cover you for serving on a nonprofit board?
If you answered yes to any of these questions, call our office to consult with your insurance agent to confirm you have adequate insurance coverage to protect your home, valuables and lifestyle. We offer this information to assist you in making decisions that can help mitigate your risk. While we cannot address every possible scenario or guarantee these tips will work for you, our goal is to support your efforts to protect yourself and your family.
Managing Director, Personal Lines
Contact: cmchale@tpgrp.com / 503.726.5668
Carrie McHale is affiliated with Geneos Wealth Management, Inc.
Information courtesy of Nationwide Private Client
