The cavalier approach that many individuals take towards insuring their valuables and themselves is beyond belief when the sums of their assets and the potential costs of any law suits are combined. Patti Clement, Vice President and Managing Director of HUB Private Client Advisors, admits that “Probably 90% to 95% of the clients I see are not properly insured.”
A white paper from ACE White Paper seems to be in agreement, “(The rich) are overinsuring against minor threats, while underinsuring against major ones.”
Fear of increasing premiums stops some clients from making claims on their insurance, rendering the whole process in itself a waste of money, while others fail to take into account that the basic insurance they have on their homes and contents – protecting possessions from fire and theft – are not going to be of use when it comes to any second properties they might have, or boats left moored elsewhere.
Then, there is the not-so-small issue of Liability. On this point, Kevin Desmond, personal lines Manager with Chubb Personal Insurance, is very clear, “Whether the person has affluence or they are famous, it’s what makes them a target.”
Employment Practices Liability can be an overlooked cover feature, but one which is going to come in very handy if a nanny makes a claim for wrongful dismissal.
“When you talk about Liability, the sky can be the limit”, Desmond says. “Just because a client has a $2million excess policy doesn’t mean that’s where the lawsuit is going to stop.”
Equally, it is an unfortunate reality that those in a position of wealth and fame are more likely to be the victims of extortion.
Paying a little bit of attention to the risk-trappings of higher value possessions, elite pursuits and support personnel is one way for wealthier clients to have confidence that their insurance is worth the paper it is written on, and most High Net Worth providers and brokerages are able to help advise on just what these risks might be.
To speak to a member of McClarrons’ specialist Private Client team, call us on 01653 697055 or email enquiries@networkportfolio.co.uk/mcclarroninsurance.com.
