According to a study released by ACE Private Risk Services, the wealthiest families in the United States have a growing concern over the way the uncertain economy may lead to costly liability lawsuits.
However, the survey also showed that regardless of this belief, those families with established or emerging wealth have failed to obtain enough liability insurance to properly cover themselves. This indicates a lack of preparation for the lawsuits that they are concerned will occur. This group appears to have a tendency to underestimate how costly these types of damages can be, and don’t appear to understand how affordable it is for them to protect themselves.
These are among the primary findings of the Ace Private Risk Services study, which looked specifically at the ACE Group’s high net worth personal insurance business. The report on the results of the survey was entitled “Targeting the Rich: Liability Lawsuits and the Threat to Families with Emerging and Established Wealth.”
It analyzed the perceptions and behaviors regarding personal liability lawsuit threats of households with investable assets worth over $5 million.
ACE Private Risk Services division president, Bob Courtemanche, explained that wealthier households feel that they are targeted on an increasing basis, especially as a result of the national struggle with taxation, income, and wealth disparities. He went on to say that the study indicated that more than two in every three people in this demographic feel that the public perceptions of those with significant wealth have become worse since the start of the recession.
Courtemanche added that nearly 40 percent of the survey’s participants feel that they are “more likely to be sued in the aftermath of the economic crisis, compared to only 7 percent who say they are less likely to be sued.” Furthermore, over 80 percent of the respondents said that they are more a higher risk target for liability lawsuits simply because of their wealth.
However, according to ACE senior vice president of claims for global personal and small commercial insurance, Jim Hageman, they still underestimate their risk.
Many industry professionals highly suggest umbrella insurance to be put in place, thus adding a layar of liability insurance, to help increase protection.