Personal automobile liability,
homeowners' liability coverage, watercraft, aviation, and umbrella liability
are designed to cover all the risks associated with day-to-day hazards. But,
many times, entrepreneurs are not as vigilant with personal risk management as
they are with their business'.
So ask yourself: do you want your partner's 17 year-old son randomly choosing
your next partner as the result of a DUI accident?
Once the underlying limits run out, the partnership share, the stock ownership,
the thrift plans, become vulnerable to seizure. Yes, your new partner might be
a bit angry with your old partner. Of course we advocate safe sober driving,
but any claim can exceed the statutory limits of liability and create an
unpleasant internal operations problem for your company. Cover the real risks
properly.
Enterprise risk management uncovers this sort of hazard. Business continuation
planning recommends surveying personal risk management among the owners and
partners of any closely held company.
Just as you protect your company assets and income against casualty and
property losses, protect your partnership too. Review the personal lines limits
of liability partners carry. Require at least several million dollars of
umbrella coverage.
Okay, you're asking why so high.
Do you want your business to thrive for many years? Do you know how long it
takes to get through the court system for a major liability case? If the
injured party doesn't settle, the business assets and partnership could be at
risk for four years.
And if the case would settle for a million dollars today, claims inflation
might make the payout three times that in four years. It is not entirely
predictable. But it is predictable that your policy limit will not rise as the
result of inflation. You must take action to increase that limit.
Stay ahead of the liability curve and protect your business structure with
proper personal risk management risk assessment, planning, and program
implementation.