What is Personal Excess Liability Insurance And Why It's Important??
- Doug Belt
- Feb 3, 2021
- 3 min read
I sat down with Jennifer Vanderlip, who is a Partner and Senior Private Client Risk Executive at M3 Insurance in Madison, WI to discuss the importance of an Individual Excess Liability Policy and some common coverage exclusions to be aware of.
So, what is a “Personal Excess Liability Policy?” It is a separate insurance policy that is designed to protect your assets above and beyond the primary liability policy limits of policies such as a Home or Auto insurance. Should you be sued for non-business related activity, or be involved in a serious accident, it provides an additional policy limit in an effort to prevent you from having to pay for the damages out of your own pocket. Often, it is referred to as an “Umbrella” policy since it casts an “umbrella” of protection around you and your assets.
DOUG: What are some common examples of where this policy might come in?
JENNIFER: Most common claims are vehicle related incidents. For example, if a vehicle hits someone riding a bike or a pedestrian.
For incidents related to property, many are slip and fall accidents. If the sidewalk is not shoveled and someone slips and gets hurt. We have seen an increase in claims involving fire pits….if someone gets severely burned or injured.
Watercraft liability is another exposure– if a boater hits another boat or hitting someone swimming in the water.
DOUG: What are some of the common exclusions, or things that are not covered we should be aware of?
JENNIFER: The Criminal Act exclusion is very common, but there are some policies that do not exclude this. You won’t find this information listed on a declaration page or quote. Exclusions are generally only described in the policy language. Your independent broker can help you find the insurance companies that will provide this coverage so that you’re not exposed. This exclusion can come into play for accidents resulting from activities such as texting & driving or drinking & driving. There are many well-known insurance companies that have this exclusion. Be careful and ask your agent to find you the companies that don’t exclude Criminal Acts.
The Punitive Damage Exclusion is another common policy exclusion. These are non-compensatory damages that a Jury would award in addition to any court costs, fees, etc. Typically, these damages are used to “set an example” and are not covered. There are companies that provide this coverage however. A good broker can help you find them.
Business Activity is generally not covered. Those who have a home-based business, or side job. Airbnb, VRBO, Uber, and Lyft, are common activities that are not automatically covered. We often see residents who rent/lease out farmland. Coverage for this type of business related activity is not included in your policy, but it can be added to your policy for an additional cost.
International Travel has some restrictions as well. Renting a vehicle in another country is often excluded, as is chartering watercraft. Those who travel abroad should be aware of this and if needed, seek out an insurance company that will provide this coverage. Many of the large regional and national insurance companies do not cover this exposure, but there are a handful that will. If you do travel abroad, be sure to look at your policy beforehand and speak to your broker about finding a policy that will protect you.
DOUG: What kind of dollar amounts are we talking about here for claims?
JENNIFER: Minor bone fractures alone can cost at least $150,000 or more as rehabilitation may be needed in addition to the initial emergency room costs.
Accidents involving vehicle versus motorcyclists/bicyclists can result in serious injuries with damages ranging from $700,000 to $8M.
If you have further questions, or would like to get in touch with Jennifer, she can be reached at 608-288-2828 or email at Jennifer.Vanderlip@m3ins.com.
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