Some individuals, particularly wealthier ones, have a higher than normal loss exposure to lawsuits. This tendency is often referred to as a suability factor. How suable you are can be determined by examining the following:
- Size of your savings account and stock portfolio
- Size of your real estate holdings
- Family income
- Profile in the community and media
- Leadership activities on not-for-profit boards
- Leadership activities in home owners’ associations
- Future income
People with a low suability factor should still strongly consider procuring a personal umbrella policy with at least $1 million in liability limits. People with a high suability factor nearly always need a personal umbrella policy with at least a $2 million limit. Remember that this is a relatively inexpensive policy that provides excess liability coverage over your homeowners and personal auto insurance policies. In some cases, it provides broader liability coverage than that found in the underlying policies.
Copyright 2012 International Risk Management Institute,Inc.