UMBRELLA CLAIMS a business . But if , for example , you are a community association and have a board of directors , you have an exposure that needs to be listed on the umbrella liability schedule for the umbrella policy to be effective . If you have purchased any of the types of liability previously mentioned , then you have already recognized the fact that your company has a real exposure that could affect you at any time .
Let me give you some atypical umbrella claims — real examples that we ’ ve paid out on behalf of our insureds — to help you get a better feel for what types of exposures may face your company that you probably never gave a second thought to :
• Building blew up due to alleged gas leak . Three fatalities . Removal of an oil tank while digging for a replacement gas line caused an explosion . Suit brought against property manager , building owner , PSE & G and contractor . Our insured building owner was found liable for $ 1.65 million . Underlying policy paid for defense costs and primary limit of $ 1,000,000 ; umbrella policy for building owner paid $ 650,000 .
• Claimant dove into pool and was severely injured . After the incident , local inspectors deemed the pool was indeed unsafe and violated code . Pool was closed . Umbrella paid $ 1,187,000 .
• Claimant was walking down stairs of insured ’ s building when railing came off of wall . At the time of the incident , claimant was found to be legally intoxicated from tests taken at hospital . Claimant suffered a broken ankle and leg . Jury found in favor of claimant and was awarded $ 2.3 million ; umbrella paid $ 1.3 million .
• Claimant dove into pool and sustained a fractured neck . Allegations of improper depth markings , improper lighting and lack of signage . Our insured was found liable for $ 3,900,000 , of which the underlying policy paid out $ 1,000,000 and umbrella paid out $ 2,900,000 .
• Two children in an apartment building were taken to the hospital with alleged mercury poisoning . Insured hired a contractor to replace all of the old thermostats in the building , which had mercury switches . However , instead of following the law with proper disposal methods , contractor placed the thermostats in the dumpsters while the children were outside playing . One of the children got severe mercury poisoning and recovered ; the other 13-year-old child suffered permanent physical and mental impairment and will be impaired for life . Building owner ’ s share of liability was $ 5,000,000 , of which umbrella paid out $ 4,000,000 .
“ AS I EXPLAIN TO MY CLIENTS , AN UMBRELLA POLICY IS BASICALLY “ SLEEP INSURANCE ,” PEACE OF MIND KNOWING THAT IN THE EVENT OF A CATASTROPHE , YOU HAVE ENOUGH DOLLARS TO PAY AGAINST ANY CLAIMS RENDERED .”
• Unit owner was burglarized and subsequently shot during the burglary . Allegations of inadequate security , failure to provide safe premises and improper lighting . Claimant awarded $ 5.2 million , of which the umbrella picked up $ 4.2 million .
• Boy on bike struck and killed by vehicle on sidewalk at entrance to association . Father was seriously injured as well . The allegation was obstruction of view and failure to maintain / regulate entrance landscaping and signage at entrance to association . Hedges at entrance way were twice the height allowed by code ; stop sign was shorter than required by code . Jury verdict of $ 12 million , of which association was found 30 percent at fault , property manager 60 percent , and driver of the vehicle 10 percent . Due to the fact that the property manager was listed as an additional named insured on the association policy , umbrella paid $ 11,870,000 .
These are just a handful of what we call atypical claims that most people wouldn ’ t contemplate when deciding on whether or not to purchase an umbrella and , if so , for what dollar amount . Unfortunately , we have multiple claims for inadequate security , obstructionof-view claims , quadriplegic pool accidents , trip-and-falls and other atypical as well as typical claims . As a result , we always recommend that clients price out limits and purchase the highest affordable limit that they can budget for . Our umbrella program that we manage nationwide can offer from $ 1,000,000 to $ 100,000,000 in limits at very reasonable prices .
Now please take a look at the number you wrote down when you started to read this article and compare it to the number currently in your head . Is it the same ? We hope that your company never faces tragedies like the ones outlined here , but we recommend you prepare yourself adequately just in case . Do you have enough “ sleep insurance ”? +
Ken Hager began his insurance career more than 30 years ago at JGS Insurance . Ken ’ s current role as Chief Operating Officer at JGS began in 1997 . Since that time he has been a guiding force in the direction and success of the JGS enterprise . Throughout the years , Ken has remained engaged with his customers and intently focused on their needs . He intently understands the risks associated with his clients operations and has been uniquely able to offer them superior solutions to their business needs .
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