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Liability Coverage – What’s that for?

tony • June 22, 2018

You may have seen the news where a 5-year-old boy from Kansas knocked over a sculpture that was on display in a community center.  The art on display was valued at $132,000 and the community center filed the claim on their own insurance.  Their insurance company then they sent a demand letter to the parents of the 5-year-old alleging the parents were negligent for failure to monitor their child.  Situations such as these are where liability coverage can help protect your hard-earned assets.

So what should you do if your find yourself in a similar situation?

First try not to freak out.  One of the most overlooked sections of the homeowner’s insurance policy is a section called liability coverage.  Most homeowner’s insurance policies come standard with $300,000 in liability coverage.  So check your policy.

What does liability insurance cover? 

In general, if a claim or suit is brought against you for damages caused by bodily injury or property damage, your homeowners insurance may provide coverage.  The liability coverage will pay up to policy limits for damages you are legally liable, but that’s not all.  It also will provide for your defense….even if the suit is groundless, false or fraudulent.

So what do I recommend?

Here’s what I would do if I found myself in a comparable situation.  First, I would take pictures and video of the surrounding areas where the incident occurred.  This could help my defense.  Was the area roped off?  Were signs posted that the sculpture wasn’t to be touched?  All this could be preserved if it’s photographed and/or filmed.  Next, I’d ask for the contact details of witnesses and for copies of any surveillance video.  Third, I would not admit fault but would provide my contact details to the community center.  Lastly, I would send any notices or demand letters to my insurance company straightaway.

Some final comments….

Let your insurance company provide for your defense and let the attorneys negotiate the settlement, if applicable, on your behalf.  Don’t take the allegations personally.  And lastly, don’t contact the other party or their insurance company without first speaking with your insurance company or legal counsel.

Want more tips like this?

Click Here for an article that explains screen enclosure coverage or Here for a guide to help you shop for home insurance quotes.

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