One of the most impactful ways to convey the importance of insurance is through sharing real experiences. The following story exemplifies the significance of excess liability coverage.  

A mother and her two children, a three-year-old daughter and a six-year-old son, were visiting a friend. While there, the mother supervised her daughter gently petting their friend’s dog on his forehead. In a split second, the dog began to maul her, causing injury to her face. This accident did not involve an aggressive dog breed but rather a sweet, gentle family dog who was being trained to become a service animal. 

What would follow included countless doctor visits, medical and plastic surgeries to repair the little girl’s facial injuries, and emotional therapy as she grew up to help her cope with her fear of dogs. Due to the increasing costs, the family had no choice but to sue their friend’s homeowner’s insurance policy. Because the family had an excess liability policy, a structured settlement was implemented to pay the enormous medical costs and the child’s therapies for her pain and suffering. Today, 25 years later, we are happy to share that she is a thriving young woman…and she loves her big, adorable dog. 

Excess Liability is among the most important insurance policies and one of the less expensive options, providing immense value. Having an Excess Liability policy adds a layer of protection as an umbrella policy, covering both home and auto. Ultimately, it provides liability insurance when the primary limit of liability has been reached in the event of a lawsuit. 

• Should a lawsuit occur, the policy can provide legal defense costs in addition to the liability limit, and depending on the case, these defense costs can run into hundreds of thousands of dollars  
• Payment is provided for a private counsel to shadow the carrier’s defense attorney 
• Excess Liability provides worldwide coverage, so if a customer is overseas and rents a vehicle, coverage is provided from the first dollar of loss 
• Employment Practices Liability Insurance and Directors & Officers exposures are available 
• Uninsured/underinsured liability coverage starting at $1 million could help protect families if they suffer injury or property loss when in an accident with someone uninsured or underinsured—this is a broad coverage option that is not limited to just automobiles and can apply to a broad scope of circumstances

The following are additional scenarios that demonstrate the importance of having excess liability coverage. 

• A customer hosts a party, and a party guest consumes too much alcohol. After leaving the party, the guest gets into an accident, hurting or even killing someone. The liability could fall back on the customer because they served the alcohol to the guest. This is called “social hosting.” 
• A customer posts on social media about someone. That someone perceives the post as defamatory and feels it has caused them harm personally or to their business. This is covered under personal injury. 
• A customer upgrades their golf cart with gas-powered engines and high-end stereo systems. Golf carts like these can resemble automobiles but lack safety equipment. The customer drives the cart at a high speed with a passenger, and the passenger is ejected. The passenger sustained a serious head injury and had to be air-lifted to a nearby hospital.  
• A child is kicked in the face by a privately owned horse at a stable. Stable owners were found responsible due to negligent supervision.
• A college student enters a coma and is expected to require lifetime care following a multi-vehicle car accident. The student’s family sues the drivers of two vehicles involved in the crash. The plaintiff’s counsel claimed one defendant was sleep-deprived while the other was on their cell phone.

Discussing Excess Liability with one of our Personal Lines teammates to review what limit of coverage options fit your unique needs is part of a proactive risk management strategy. Sometimes, a second layer of Excess Liability may be necessary to assist with having the appropriate limit to fit your needs. Connect with our team to learn more about what options you may have available to help protect you and what you value most.

Laurie Salkin

Personal Insurance Advisor