[The Wealthy] are more likely to be sued, but excess personal liability insurance doesn't have to cost a fortune.
It’s safe to say that, if there’s a risk out there, there’s also an insurance underwriter somewhere dying to write a policy for it. However, if you are especially affluent or risk-prone, excess personal liability insurance (“umbrella insurance coverage”) can be a helpful safeguard.
Any trial attorney will confirm one unshakeable truth - money attracts unwanted attention. Unfortunately, in our litigious society, all it takes is one particularly obstinate person out to “get the rich” to team up with a less-than-scrupulous attorney and make it their mission to ruin your life with a frivolous lawsuit. This was the subject of a recent article in Financial Planning titled “Covering Up.”
Not only will you pay for your defense, but juries can also be unfair. In an era of class envy, you may get a jury that wants to help one of its own a “lawsuit lottery” at your expense. To help mitigate the risk of a lawsuit judgment, consider taking out umbrella insurance coverage just in case.
Reference: Financial Planning (April 1, 2012) “Covering Up”