High net worth individuals have many responsibilities, but one that should be close to their hearts – protection of their assets from people who target the wealthy – sometimes does not get the priority it deserves.
A recent survey by ACE Private Risk Services of people with at least $5 million in investable assets demonstrated that most have not adequately protected themselves from threat of lawsuits that could be prompted by any type of accident involving their homes or other property – or even from volunteering on a non-profit board.
The Top Liability Concerns of the Wealthy
Auto accidents: 47 percent
Worker/household employee injury while on property: 31 percent
Visitor is injured while on your property: 29 percent
Being accused of misdeed or being held liable for incidents in connection with volunteer work: 22 percent
Being sued as a result of a side business on your property: 19 percent
Lawsuits seek the wealthy
While many people face the same risks – auto accidents, employment liability, pets that might bite a visitor to the house – high net worth individuals are more likely to be sued in those situations and to be held liable.
Well-publicized lawsuits over the past several years have resulted in multi-million-dollar judgments against high net worth individuals. And laws allow lawyers representing the aggrieved to zero in on the wealthiest defendant in a suit regardless of whether that person is solely or only partially guilty of a civil offense.
Surprisingly the survey showed that a large percentage of wealthy do not have even basic insurance protection that could cushion large, unexpected settlements and very few have bought enough insurance to protect themselves from life-changing settlement amounts.
The importance of protecting assets
Even the wealthiest should ask themselves whether they could absorb a damage award […]