How often do your plans go exactly the way you planned them? We’d venture to say almost never. Sometimes those detours and changes will take you in better directions; sometimes they will put you in difficult situations. In the case of the latter, it’s always useful to have some plan B like insurance. But even then, you can’t always account for all possible scenarios. This is when umbrella insurance comes in. This type of insurance is also known as excess liability insurance, covering various types of collateral damage occurring to another person or property that is not covered by your homeowners, business, auto, or boat insurance.
We believe umbrella insurance has become more of a necessity in the past year or so and here’s why.
- The business and public services landscape is a bit of a minefield nowadays
With the many (often, much needed) civil/human rights movements, individuals have become more and more vocal about what is societally acceptable in terms of speech and general treatment. We’re now even seeing a new record of people quitting their jobs in search of better opportunities. It’s an unprecedented time in history, when individuals are refusing to simply accept less than optimal work conditions and, in fact, many have expectations for remote work possibilities, forcing companies to reconsider their culture and policies.
This, however, comes with higher risks of getting sued as a business. That is not news for most business owners; in fact, it’s something they have come to expect and prepare for. However, the numbers paint a darker picture when it comes to personal injury, product liability, and civil rights. Before the pandemic, we were seeing most litigations and civic court cases dropping, EXCEPT those related to the topics mentioned above. We also know that during the last recession in 2008, contract-related fillings increased the highest within a period of 5 years. It should be then expected that, during the latest adversities with the pandemic and civil unrest, those numbers would be even higher.
Healthcare businesses and others that depend on heavy public interaction are specifically vulnerable to these types of lawsuits. If an individual or a group claims that your business did not take proper precautions to prevent the spread of COVID-19 and someone is sickened or unfortunately dies, a court case could be financially devastating. Healthcare businesses in Pennsylvania, like nursing homes, have already faced these lawsuits.
Commercial umbrella insurance can protect you and your business against potential risks arising from such situations, like lawyer fees, settlements, and most damages to another person’s body or property. But that’s not all it can do.
- Libel and defamation are prevalent in today’s cancel culture
Whether you’re an avid social media user or an occasional TV news viewer, you have likely experienced or, at least, heard about the latest trend in the US called cancel culture or call-out culture. This one goes along with the point above, where the population at large has been more vocal about their rights, but taking it a step further by calling out public figures on their “wrongdoings.” While this practice can lead to productive, useful debates, it can also cause lots of harm when words and actions are judged outside their context. Some of its consequences include defamation, slander, libel, and censorship.
One public comment made by an individual or a business can potentially destroy your reputation, lead to a boycott, end international partnerships, or cause other kinds of unforeseen monetary damages that were completely unexpected. Especially in Pennsylvania, where the pre-complaint discovery rule has been implemented, libel lawsuits are even more prevalent.
Umbrella insurance can protect you from some of the negative consequences of such cases. It can help you defend yourself in the case of false arrests, wrongful imprisonment, or malicious prosecution. It may even allow you to cover some of the compensation for moral damages or unintended suffering caused by your actions.
- You have some responsibility for others’ actions
Sometimes, your only mistake is believing that you can always put your trust in others, whether that be your dog, friend, or your own child. With all the precautions taken in Pennsylvania to reduce teen driving fatalities, around 12% of all vehicle crashes are still caused by young drivers, with ages up to 20 years old, even during the pandemic when the number of incidents is the second-lowest ever recorded. Whether you allow your child to drive your vehicle or they borrow their friend’s, you’re still responsible for their actions while driving.
But if it’s not your teen, then it could be one of your party guests. Pennsylvania is one of the states where social host liability applies to guests of all ages. Basically, if you as a host serve your guests alcohol, whether they are of age or not, and something happens to them after they leave your property, then you may be liable for any personal injuries they would incur while intoxicated. And if that isn’t scary enough, just imagine walking your dog and something triggering him/her to the point where they bite someone or get into a fight with someone’s animal, causing injury. This is another case where you would have to pay some good money for the damages caused.
In summary, if an external party, that you are responsible for, causes damage to another external party (animal or person) or their property, you could be liable for covering those costs. This is when umbrella insurance can really prove useful, helping you pay some of those unfortunate and unforeseen bills.
Overall, umbrella insurance is not something to easily dismiss. With the amount of uncertainty in today’s volatile world and the number of lawsuits constantly rising, it is simply a good idea to carry this type of insurance. If you are still confused about this option, then reach out to us. Gilmartin Agency can help you determine your specific risks and the exact coverage that you need. Find us in Scranton, Pittston, or Lehighton, and let’s have a talk about your umbrella insurance needs.