Accidents happen. Even the most innocent of activities can lead to some devastating consequences. Consider the death of a young 11 year old girl who choked on a marshmallow at her friend’s birthday party and subsequently died. Who would have thought that something as common as a marshmallow could tragically alter the life of one young girl and her family?
The result of this tragic event is a lawsuit against the family who hosted the party. An allegation in the lawsuit accuses the family of failing to provide adequate supervision of the children at the party. It also goes on to allege that marshmallows are a choking hazard to young children.
I will not comment on what is right or wrong about this lawsuit but want to point to a reality that not a lot of people think about and that is you can be sued for a lot of things; this lawsuit is just one of them.
Whether you host a Super Bowl party that serves alcohol or provide a pool party for your kid’s soccer team, as a homeowner or renter you could be held responsible for the actions that occur in your home or apartment.
If you have a renters or homeowners insurance policy, liability coverage is built in to protect you from lawsuits alleging injury from parties you host. The minimum limit that comes with a standard policy is $100,000. Some insurance companies provide a minimum limit of $300,000.
Let’s consider one theoretical outcome – this lawsuit goes to court and the court rules in favor of the family who lost their daughter. How much would the court pay? Legal experts can’t tell you for there are a variety of factors involved that courts use to determine an amount.
But would you feel comfortable going to court knowing your insurance policy has a $100,000 or maybe $300,000 limit? You can buy higher limits under your Homeowners or Renters Insurance policy, but the most you can buy is $500,000. If you are looking for limits above that you have to buy a Personal Umbrella policy where limits start at $1,000,000.
Consider this once your insurance policy limit is depleted from paying damages from a lawsuit, other sources of money or assets you own will be brought to bear. In short, anything with a dollar value could be up for grabs: your home, savings, wages etc.
It’s hard to make predictions, especially about the future. But you can choose now the kind of liability limit that is going to make you comfortable sleeping at night.