In recent decades, America has become a lawsuit-crazy society. The greater increase in assets and earning power, the more at risk we become than the greater the need we have to protect ourselves. Many households, property owners and companies become targets of lawsuits and claims for compensation by anything that happens at home or at work. As a result, many of us purchase umbrella insurance coverage to protect ourselves against litigation. But exactly how does umbrella insurance coverage protect defendants in a personal injury case?
Nearly all of us purchase a homeowner’s insurance policy as an effective tool for safeguarding our property that can be damaged by wind, fire, flooding or natural disaster. However, the policy may not provide coverage or only minimal coverage in any event where an individual suffers injury on the premises. This means if visitors at home suffer injuries from a trip and fall or swimming pool accident, the policy will likely cover the injury claim.
In fact, the most common types of premises liability lawsuits for homeowners and property owners involve:
- Slipping and falling, accident in the stairwells, on steps, icy sidewalks and wet surfaces
- On-site guests suffering injuries at the pool
- Dog bites
- Lawsuits based on defamation, invasion of privacy, slander and libel
- Wrongful eviction
- Malicious prosecution
- Wrongful death on the premises
Protection Against Judgments Involving Negligence
Not every homeowner’s insurance agreement adequately protects the family against negligence, carelessness or reckless behavior. Because of that, homeowners will often buy umbrella insurance that offers a massive amount of protection or insurance coverage at an affordable cost. Usually, this coverage is not offered as individual stand-alone protection, but only as a rider to the homeowner’s insurance policy or renter’s liability coverage.
Not all cases involving premises liability and in out-of-court settlement compensation or a judgment issued by the court. However, property owners, occupants, tenants and lessees can still be held legally liable for injuries and damages. The legal action taken against the household or owners often pose a significant financial risk. The costs involved in medical expenses, legal fees, and other financial recompense can become uncontrollable, even in a small lawsuit or claim for financial recovery.
Impact of Insurance on a Personal Injury Case
While many property owners will take out an umbrella insurance policy, the amount of coverage can vary greatly. The individual’s profession, location and aversion to risk are all key factors in the amount of coverage required. Insurance policy liability coverage of automobile and home policies typically top out at $300,000-$500,000 per incident.
However, approximately one out of every seven settlements and liability awards in personal injury cases top out at $1 million or more. Any shortfall in insurance coverage could financially crush families, business owners and individuals should the personal injury attorney working for the victim successfully wins a high dollar amount against the defendant. Some policies provide a free attorney to handle the defense, which can be an added benefit to minimizing the total amount due to the victim.
Increasing the Chance of Being Sued
Individuals without property who rely on public transportation usually have no need for an umbrella policy. Alternatively, if you own a car, home or other expensive items you have a significant increased potential of being sued. You should consider an umbrella policy if you:
- Have a long commute to work and home.
- Take the roadway, highways and side streets during rush-hour at a time when motorists have an increased risk of being involved in an accident.
- Have a swimming pool at home even if it is protected by a high security fence.
- Own one or more dogs.
- Frequently invite guests over to the house.
Even if your lifestyle and financial choices reduce your chances of being sued or you live very carefully, you are likely still at risk. It is important to note that not only the rich get sued. As society continues to increase its litigious behavior, the safest course of action involves purchasing adequate insurance to cover every possibility including being bald in a personal injury case.
All of our financial situations change over time, including yours. Ensuring you have adequate coverage is a good way to protect yourself and your family should you unexpectedly find yourself involved in a personal injury case from a victim seeking financial compensation.