What Could You Lose in a Lawsuit?

Lawsuits are very common nowadays, with an estimated 40 million lawsuits being filed every single year according to Forbes Magazine. Lawsuits can come with a lot of expenses, including legal fees for both those who sue and those being sued, as well as the cost of a judgement, which could result in a significant payout.

Over the last decade, payout amounts have been steadily increasing, especially those that are the result of a judgement related to Vehicle Liability or Premises Liability. The table below shows the average liability claims payout per year from 2015 through 2018.

Assets Exposed Table

Year of Award Average Vehicle Liability Award Average Premises Liability Award
2008 $263,017 $777,583
2010 $193,928 $570,248
2012 $293,117 $426,861
2014 $444,020 $475,861
2016 $722,614 $660,819
2018 $864,019 $803,003

This information can also be seen in the graph below, which shows the average judgement amounts for Vehicle Liability in Orange and Premises Liability in Blue.

What is Vehicle Liability?

Vehicle Liability is the legal responsibility you hold when owning and driving a vehicle. It is what holds you accountable in the event of an accident that you may cause.

What is Premises Liability?

Premises Liability is the legal responsibility that you have regarding accidents and injuries that take place on your land and/or premises.

The trends above show that payments resulting from lawsuits have increased in the past, and evidence indicates that they will continue to increase.

If you are sued and are facing a judgement, you will have to pay an amount of money that is decided by the court. This money can come from different sources, and each state has different guidelines for what can be seized by the court and what is exempt from seizure. The blurbs below apply to California Law.

How Insurance Can help you protect your Assets

One of the best methods to prevent a judgement in which your assets are liquidated in order to satisfy a judgement is to purchase an umbrella policy. An umbrella policy is an insurance policy that expands protection for one’s current policies. umbrella policies can be purchased personally or for one’s business, and are usually on the affordable side of insurance.

An example of an umbrella policy in action could occur after a vehicular accident. If your Auto Insurance Policy has a limit of $100,000 for medical costs, but the medical costs add up to more than $100,000, you might get sued for the rest of the money. An umbrella policy could prevent this from happening by raising the limits of your overall coverage, and it could also cover legal fees and judgement costs in the event of a lawsuit.

Everyone’s needs are different, which is why at the Archer Insurance Agency we make customized insurance plans for each of our clients. If you have any questions about insurance or are interested in an umbrella policy reach out to us via phone or email or click the links below!