Overcome potential legal risks with excess liability insurance
At a time when people around the world are found to be busier suing others and litigating for more claims than ever before, owning just a basic personal liability policy won’t do. Most financial planners here are strongly advocating that people under certain potential risks must buy what they call excess liability coverage.
Excess liability insurance is essentially an extra layer of protection for anybody who might suffer a heavy financial loss in the event of being sued due to injury caused to another person as a result of alleged negligence at home or anywhere else. Your excess liability insurance comes in handy when the judgment pronounced against you has a quantum of award that exceeds your family’s total assets, which could in turn threaten to cripple your future earnings and savings.
The situation could be scary. Imagine your car rams into another speeding car. While you may be able to determine the value of the damaged car, it is difficult to assess the value a life-changing injury or even a life lost. Furthermore, there is no guarantee of the legal judgments and the quantum of award you would receive. At the end of it all, you might not even be able to afford legal defense costs to try and win the case and your future earnings may even be garnished to satisfy the settlement.
This is when a good excess liability insurance cover comes in. Even if the person has a liability insurance coverage under auto and homeowner’s policy, excess liability insurance cover increases that basic liability cover substantially. Not to mention, excess liability insurance cover can be procured only if the person has basic personal liability cover.
There are many kinds of excess liability insurance policies that one can look for. Insurance companies offer many kinds of excess liability policies that suit both individuals and large corporate holdings. Insurance companies, in consultation with loss control and risk controlling professionals draw up customized excess liability insurance plans and policies to suit individual and corporate needs. As such, insurance companies are even in the business of making specific risk assessments and proposing practical remedies to prevent and mitigate losses.
The advantages are many. Excess liability insurance policy holders can look for specific benefits under their respective schemes. Almost all their policies offer coverage against injury and property damage caused by the policy holder. They also offer additional protection against claims arising from slander, false eviction, libel, false arrest and so on. What’s more, in some cases, the holder can receive additional funds to meet legal defense costs. In some situations, one can avail the benefit even when a lawsuit is groundless or not covered by the underlying policy.
The excess limit of liability is huge. The excess liability insurance sum could go up to a good USD 1 million to USD 2 million and beyond in the US.
As excess liability insurance policy is an additional policy, the policy holder can avail attractive discounts for holding multiple policies with the same insurer. At the same time, some insurance companies are open to provide the additional liability protection to basic liability protection even if the basic protection is not placed under them. Excess liability insurance policies are usually subject to renewal every 12 months. Sometimes the premium may increase or your eligibility for policy renewal could be jeopardized based on claim experience.
Some insurance providers offer only home insurance solutions (like personal injury or property damage, auto or any other personal liability) for excess liability, while some others focus only on corporate houses and business establishments.
All insurance providers function as per rules laid down by the general statutes of a particular country or of individual states. Many large establishments are going in for excess liability insurance cover for their employees. Each State, through the Defense of State Employees Act and the Excess Liability Policy has made it mandatory to protect, defend and indemnify employees from legal suits brought against them in the scope and course of their employment. In fact, in many states in the US all individuals currently employed by and working for the State are covered by the Defense of State Employees Act.
The internet world is a good enough source to locate insurance providers who offer excess liability cover. The websites offer quick quotes with competitive rates and added-value extras. They come complete with online application forms and facilitate discussions on the kind of excess liability coverage that one might want to subscribe.
Nobody likes to lose a legal battle. Worse, if legal suits are worth hundreds of dollars. Even though excess liability insurance depends upon the basic policy of the insurance holder, one might have to carefully assess the kind of liabilities that he/ she may be susceptible to, in order to look for the right kind of excess liability insurance. With a good excess liability insurance policy, it is wise to ensure that you are fully covered for these potential legal situations.
Published: 2008-01-24 About the author or the publisher
Author: Paawana Poonacha Cariappa
Byline articles for publications,PR content for corporates, syndicated articles for bigwigs, rhymes and short stories for children, and poetry for the like-minded...taking forward over 10 years experience as journalist/writer, presently working as Content Head for a Mumbai-based communications firm. You can view my bylines as "Paawana Poonacha" or "Paawana Poonacha Cariappa".
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