Choosing liability limits

Determining your financial liability exposure is very different from your financial property loss exposures.  The value of a home, building, car, ring, etc.  is finite and can be determined for insurance purposes.  The amount you could be held liable for from a law suit cannot be predetermined. Here are some important questions to ask yourself when choosing your liability limits:

• What are your total assets at risk?  This is best discussed with your financial advisor
• Do you have inexperienced drivers in your household?
• Do you reside in or frequently visit areas that include high-income earners, high-profile individuals, celebrities, or individuals of considerable wealth?
• Do you have other people's children in your car or visit school campuses regularly?

Here are some other risk factors to consider when choosing personal liability limits:

• Teenage driver exposure
• Drivers over age 75 (this is typically when rates go up)
• Students attending college
• Hosting house parties or charitable events
• Attractive nuisances
• Animals residing at home or visiting
• Social media activity in your house
• Vacant land
• Director or officer positions on boards
• Household employee exposure
• Co-signed loans or leases

Business liability risk factors to consider:

• Director or officer positions held
• Self-employment
• Defective craftmanship
• Wrongful employee actions
• Sexual harassment
• Damage to the property of customers
• Wrongful termination
• Discrimination
• Negligence
• Reputational injury
• Product liability
• Customer liability
• Employee injury