Personal Liability Insurance For Dow Incorporated Employees

What Is It?

Personal liability insurance safeguards your assets in the event that you injure another person or damage their property. It is referred to as third-party insurance because it protects you in the event that a third party submits a claim against you. If you are found legally liable for causing an injury or property damage, your personal liability insurance will, if necessary, provide a legal defense and pay the claim up to the policy's limits. Personal liability insurance can be purchased as part of a comprehensive policy (like homeowners or auto insurance) or as a separate policy (like a personal umbrella liability policy). Personal liability insurance is important for everyone, not just affluent or reckless individuals, as accidents can happen to anyone. The amount of coverage required varies depending on risk tolerance and assets to be protected.

Determining Your Need for Personal Liability Insurance

Do You Need Personal Liability Insurance?

Some erroneously believe that personal liability insurance is only necessary if you are affluent (and therefore more likely to be sued because you have more assets than the average person) or reckless. Nonetheless, we would like to remind our Dow Incorporated clients that catastrophes can occur anywhere and to anyone. You may accidentally hit a bicyclist while driving to your Dow Incorporated employment, or spill hot coffee on your neighbor's arm. Your cat could scratch your neighbor's vehicle, or your friend could slip and fall on your icy stairs. Regardless of how cautious you are, you may one day be sued for injuring someone or damaging their property. Although accidents are unavoidable, we would like to demonstrate to our Dow Incorporated clients how they can delegate some of their financial risks to an insurance company by purchasing personal liability coverage.

Tip:  Your policy's liability coverage may extend to your relatives as well. For instance, your father may be covered if he injures another motorist while driving your vehicle. Or, if your child breaks your neighbor's window by accident, your policy may cover the resulting damages. Check your liability insurance policy to ascertain how it defines a relative, as the definition varies between policies.

How Much Personal Liability Coverage Do You Need?

Even if you have few assets to safeguard, you probably need more liability insurance than you believe. More lawsuits and claims are being filed than in the past, and it may be expensive to defend yourself. If you do not have liability insurance, you will likely be responsible for the entire cost. If you have liability insurance, your insurer may settle out of court because its legal fees may exceed the policy's liability limit in a significant lawsuit. In addition, juries frequently award damages in excess of the actual monetary quantity of the damage. They award compensation for physical and mental anguish, as well as punitive damages. Even if you have liability insurance, you may owe money if the court-ordered damages against you exceed your policy's liability limits. If you cannot pay the damages immediately, your future earnings and assets could be subject to liens and/or garnishment.

Because there is no optimal quantity for every individual, the amount of personal liability coverage you require depends in part on your risk tolerance. Can you afford to pay for a claim out of pocket, or would even a minor claim jeopardize your financial stability? For Dow Incorporated customers who already have liability insurance, please review your current policy. Determine if your liability limits are sufficient or if there are any coverage voids you'd like to fill (for more information on coverage under typical personal liability policies, see the section below).

Basic Liability Protection Under a Homeowners or Automobile Insurance Policy

Insurance Coverage

If you have a homeowners, auto, or other property insurance policy (e.g., mobile home or renter's insurance), you have fundamental liability coverage. This policy will protect you from a variety of liability claims. Your insurance company will defend or resolve claims and lawsuits brought against you and pay for covered damages (bodily injury or property damage) up to the policy's liability limits (usually $100,000 to $300,000 per occurrence). No deductible applies. Consider purchasing a personal umbrella liability policy (see below) if you desire maximum liability coverage or if you want broader coverage.

Tip : Bodily injury and property damage liability insurance is often required by state law for automobile owners, although a few states do not require you to carry even the most fundamental auto insurance. When required, minimum mandatory liability limits are typically low ($40,000 per accident is typical). Automobile owners' bodily injury and property damage liability insurance is typically sold with split limits (e.g., $100,000/$300,000/$50,000), which means that your policy covers up to $100,000 for any one person you injure, $300,000 for all people you injure, and up to $50,000 for property damage.

Comprehensive Personal Liability Insurance Coverage Under A Personal Umbrella Liability Policy

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What Is A Personal Umbrella Liability Policy?

A personal umbrella liability policy supplements your existing liability coverage by insuring you against significant losses or losses that are not covered by your other personal liability policies. Although umbrella policies are frequently added to existing homeowners or auto policies, they can also be purchased from a different insurer. Your insurer will typically require you to carry basic liability insurance with specified minimum limits in either case.

Example(s):  Before his insurance company would issue him a $1 million umbrella policy, Hal had to increase the liability limits on his homeowner's and auto policies to $100,000/$300,000/$50,000, respectively.

Higher Liability Limits than Basic Liability Coverage

Employees and retirees of Dow Incorporated should consider purchasing a personal umbrella liability policy because it provides greater liability coverage than a standard liability policy. Typical liability limits for umbrella liability policies are $1 million per occurrence. Nevertheless, the umbrella policy may pay multiple claims of $1 million per policy period, so your actual coverage may be greater. However, some insurance providers impose limits on the amount that can be paid out during the policy period or over a lifetime.

The typical limit is $10 million. Since an umbrella liability policy is issued in conjunction with basic liability coverage, the combined limits of each policy will constitute your total liability protection. For example, if you have an auto policy with a liability limit of $100,000 and an umbrella liability policy with a $1 million liability limit, your total liability protection is $1,100,000.

Broader Coverage than Other Types of Liability Insurance

An umbrella liability policy protects against losses that are not covered by standard liability insurance. It protects you against personal injury losses due to libel, slander, unlawful eviction, false arrest, and invasion of privacy, among other unusual occurrences. Your umbrella liability policy may also cover international damages. In addition, an umbrella policy may pay a proportionate share of a claim even if your primary liability insurance policy is unable to pay its portion, either because you failed to comply with the policy's terms or because the insurance company went bankrupt.

Claims Are Paid Under an Umbrella Policy Only After Basic Liability Coverage Is Exhausted or Unavailable

After a deductible is satisfied, if you have an umbrella liability policy, it will pay a claim in one of two ways:

• If you are deemed legally responsible for injuring someone or causing property damage, your umbrella policy will pay the portion of the claim that exceeds your basic liability coverage's liability limits.

Example(s):  Hal bought a homeowners insurance policy (with liability coverage of $100,000) and an umbrella liability policy for $1 million. When Hal's swimming pool developed a leak and caused $25,000 in harm to his neighbor's yard, his homeowner's insurance paid the entire claim. When Hal was sued after a decaying oak tree on his property fell and injured a neighbor's daughter, his homeowner's liability coverage paid only the first $100,000 in damages (the policy's liability limit). Hal's umbrella liability policy paid the remaining $900,000 of the court-mandated settlement.

• If the liability exposure is not covered by your base liability coverage but is covered by your umbrella policy, your umbrella liability policy will pay the total damages for bodily injury and liability.

Example(s):  Hal borrowed his brother's lawnmower and accidentally drove over his neighbor's sleeping deaf cat while it was napping in the yard. Because the damage was caused by non-owned property in Hal's care, which is explicitly excluded from his homeowner's policy liability coverage, Hal's $1,500 veterinary bill was covered by his personal liability umbrella policy.

Caution:  A personal umbrella liability policy is not the same as excess personal liability insurance, despite the fact that the two terms are sometimes used interchangeably. Typically, excess liability insurance provides additional coverage only if the basic policy also provides coverage, whereas an umbrella liability policy may provide coverage that differs from that of the basic liability policy.

What Personal Liability Insurance Does Not Cover

Although a personal umbrella liability policy will cover more categories of risks than a standard personal liability policy, no personal liability insurance policy will protect you from every possible loss. Generally speaking, all varieties of personal liability insurance exclude the following:

• Claims arising from the insured's business or profession (certain categories of business activities may be covered under a homeowners or auto policy, so Dow Incorporated employees should review their policies).
• Claims resulting from the insured's intentional infliction of bodily injury or property damage
• property damage suffered by the insured

Other typical exclusions in a homeowner's insurance policy include damage caused by communicable diseases and violence. A vehicle insurance policy may exclude coverage for incidents and losses that occur overseas or while the vehicle is in transit. Typically, umbrella policies exclude liability losses associated with aircraft, damages caused by watercraft that are not covered by your homeowners policy, and injuries sustained by a person who is covered by workers' compensation.

Questions & Answers

Can Anyone Purchase A Personal Umbrella Liability Policy?

Many Dow Incorporated employees are inquisitive about the availability of this policy. No. The underwriter is responsible for determining who is eligible to purchase a personal umbrella liability policy. After a person has submitted a policy application, the underwriter will evaluate the application and may reject those who pose an excessive risk to the company. For instance, broadcasters may be denied coverage due to the high risk of personal injury claims they face. Because their professions expose them to publicity, politicians and actors could be denied coverage. Individuals whose property poses a risk (such as pool owners without a fence) may also be denied coverage.

Is A Personal Umbrella Liability Policy Expensive?

The cost of the policy is another inquiry we receive from Dow Incorporated customers. In relation to the coverage provided, the price is reasonable! An umbrella liability policy typically costs between $150 and $300 annually and substantially expands liability coverage (typically from $500,000 to $1,000,000). If you are required to increase your policy limits, you may be required to pay more for your homeowner's or auto insurance.

Conclusion

Retirement planning is like a road trip where you have to plan your route, budget your expenses, and make sure you have enough gas to reach your destination. Just like how a road trip requires preparation and foresight, retirement planning also requires a strategic approach. It's crucial to map out your financial goals, calculate your expenses, and invest wisely to ensure you have enough savings to live a comfortable retirement. Just as you wouldn't want to run out of gas in the middle of your road trip, you don't want to run out of money in your retirement years. With the right planning and strategy, you can enjoy a smooth journey towards a financially secure retirement.