Why does that matter? Just ask a couple we’ll call Rick and Sue Smith, for example. They recently moved into a new home and bought a backyard trampoline for their children, but did not update their umbrella policy to reflect this new purchase. Then the worst happens—a friend of the Smiths’ children is injured while playing on their trampoline. Following a lawsuit, the Smiths must pay $2 million in damages. Unfortunately, the Smiths’ homeowners and umbrella policies only cover $1.1 million in liability—not including legal fees. If you think the Smiths are personally on the hook for the rest, you’d be right.
While extreme, this scenario is all too common. Avoid taking a direct hit to your financial investments by conducting an annual review of your liability exposures. If you’re not sure what could pose a risk, talk to your independent agent or broker. They can help you conduct an audit and help ensure you have the appropriate levels of coverage in place.
Additional resources are available at chubb.com/financialadvisor
Fran O’Brien is Division President, North America Personal Risk Services at Chubb.