You might know that American courts deal with almost 40 million lawsuits annually. Any lawsuit can cause financial harm, but it is more so for high-net-worth individuals. Also, high-profile lawsuits can damage your client’s image.
Damaged reputations can limit the growth of your high-net-worth clients.
You can’t guarantee your clients won’t get sued. However, you can help manage your client’s assets by reading this article. This guide also provides risk management tips for high-net-worth families.
People purchase insurance to have protection in case an incident, claim or lawsuit occurs. That’s what people expect, and that is what Prime Insurance Company provides.
Now, read on!
Why High Net Worth Individuals Are Lawsuit Targets
Some high-net-worth individuals use their public image to make money. However, others chose to stay out of the limelight for personal reasons. Unfortunately, high-net-worth people often in the spotlight, like celebrities, draw both good and bad attention.
Your client’s legal team might find it cheaper to settle a lawsuit. Also, your client’s reputation might suffer if the lawsuit details reach the public. For example, rich men might face an increase in sexual harassment lawsuits.
It doesn’t matter if your client is guilty or innocent. Or if the matter is insignificant.
Your client’s status plays a significant role in lawsuit payments. Defense attorneys gain more suing high-net-worth individuals.
Managing Assets for High Net Worth Individuals
No matter how good your asset protection strategy is, high-net-worth individuals face a range of potential lawsuits.
Do you have high-net-worth clients in the medical industry? Keep in mind there are almost 20,000 malpractice lawsuits annually. Giving your clients professional liability insurance helps against potential lawsuits.
The same is true for lawyers who are high-net-worth individuals. According to the American Bar Association, “one in five lawyers face a lawsuit.”
Prime Insurance Company offers a wide range of personal and business insurances for high-net-worth individuals. Depending on your client’s needs, consider these risk-management plans:
- Personal umbrella insurance policies
- Commercial liability insurance
- Directors’ and officers’ insurance
- Professional liability insurance
- General liability insurance
You might also consider trusts to protect your clients and ultra-high-net-worth families. However, trusts don’t 100% guarantee against high-profile lawsuits. So, consider Prime professional liability insurance for your clients.
1. Personal Umbrella Insurance Policies
A true umbrella insurance policy improves your client’s liability insurance. These umbrella insurance policies help provide extra coverage and benefits that standard liability insurance doesn’t offer.
Sometimes high-net-worth families might face high liability for car or boat accidents. This policy can also assist in lawsuits for property damage.
Your real-estate clients need an umbrella insurance policy for asset protection. First, your client must have basic liability insurance coverage.
Your client’s small business might come with more risks. Additional risks might lead to more lawsuits. That’s where our commercial umbrella insurance policies might come into play.
You can tailor your client’s policy based on individual risks. Also, Prime Insurance Company makes these policies easier to finance.
2. Commercial Liability Insurance
According to Forbes, “35% to 50-plus percent of small businesses receive a lawsuit.” So, your high-net-worth clients with small businesses should have this vital coverage.
Commercial liability might help your client with business stoppages. Insurance providers can read more about this beneficial policy.
3. Directors and Officers Insurance
Corporations help to shield their members from risks and liability. Usually, a corporate member receives a lawsuit from outsiders. But, sometimes, these officers get a lawsuit from inside the company.
For example, an ex-employee might sue your client after getting fired. A directors’ and officers’ insurance policy takes on these risks:
- Negligence or damaging statements
- Damaging work actions
- Failing to perform tasks
You can also read more about helping your client with risk management.
Sometimes a corporate member might have to make a deposition. Such statements might harm a corporation’s image and net worth.
This is another reason to have directors and officers insurance for your clients. You can visit the section on directors’ and officers’ insurance for more options.
4. Professional Liability Insurance
Sometimes your client might give another client terrible advice. Other times, your client’s actions might lead to money loss. If your client’s actions lead to money loss, a lawsuit might be coming their way.
So, wise insurance providers should consider a professional liability insurance plan for clients. If your clients are responsible for physical harm, it’s nice to have this policy for support.
Insurance producers who are high-net-worth individuals might be lawsuit targets as well. Your client might sue you for financial damages. So, you shouldn’t exclude a professional liability plan for yourself.
You can also read more about reducing professional liability risks. We step in where other insurance providers don’t take on your clients’ risks.
5. Specialty Liability Insurance
Accidents and incidents can happen at any time. Prime provides customized coverage to provide a comprehensive policy that leaves your client with peace of mind.
There are many coverages your high net worth clients can include in their policy including alleged sexual abuse and molestation liability, alleged assault and battery liability, and more.
If your client owns a dog or other pet, we can also include animal liability to cover third-party bodily injury and third-party bodily injury. We can even cover dog breeds deemed aggressive or have a bite history.
There are many coverages we can offer so we will listen to you and your client’s needs to come up with a customized plan.
Trusts for High-Net-Worth Individuals
A trust places assets out of your client’s name and into the trust. Asset protection trusts exist for this reason. This method can also help keep the names of lawsuit targets out of the press.
You can use both domestic and foreign asset protection trusts for your clients. Domestic asset protection trusts are only available in some states. A trustee manages the trust on behalf of your client.
Foreign asset protection trusts help protect the assets of high-net-worth families. You might consider offshore accounts to help guard against judgments. And your clients can benefit from our high-net-worth policies.
More Insurance Solutions for High-Net-Worth Individuals
Prime Insurance Company has more than 40 years of experience dealing with high-net-worth clients’ needs. Our expert staff is here to help insurance process clients’ claims.
Our extensive business liability extends to the aviation and commercial auto industries. Consider our liquor liability plans for your high-net-worth clients in the liquor industry. Before serving alcohol to minors, have a liquor liability plan in your arsenal.
Do you have clients who are trucking or car dealership owners? Then casualty coverage is a must for your clients’ asset protection.
Don’t worry if your clients are lawsuit targets because of firearm-related injuries. Prime has insurance options for gun owners.
Contact us today about our insurance plans for high-net-worth individuals. Or you can call us at 800-257-5590 for a quote. You can also email us at info@primeis.com.
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Authored by Rick J. Lindsey, CEO, President, and Chairman of Prime Insurance Company
Rick J. Lindsey hails from Salt Lake City, Utah. He began working in the mailroom of his father’s Salt Lake City insurance firm, getting his introduction to the business that became his lifelong career. Lindsey quickly rose through the ranks while working in nearly every imaginable insurance industry job. As an entrepreneur, specialty lines underwriter, claims specialist, risk manager, and a licensed surplus lines broker, Rick J. Lindsey is highly skilled in all levels of leadership and execution. As he progressed on his career path, Rick discovered an urgent need for insurers willing to write policies for high-risk individuals and businesses. He was frequently frustrated that he could not provide the liability protection these entities desperately needed to safeguard their assets. He also formed the belief that insurance companies acted too quickly to settle frivolous claims. Lindsey decided to try a different approach. He started an insurance company and became the newly formed entity’s CEO. This opportunity has enabled Rick to fill a void in the market and provide a valuable service to businesses, individuals, and insurance agents who write high-risk business. Read more…
