My Asset?

You buy a liability policy and figure, "That's it I'm covered. If I'm sued, my insurance will take care of it." You hope!

Although liability insurance is an excellent (and recommended) first line of defense against lawsuits, it has its limits: you could be sued for more than your coverage amount, or your policy may not cover you in situations where you thought it would be covered.

In fact, liability insurance covers only about one in three lawsuits. Hence, no insurance will protect against divorce, bankruptcy, or tax problems, although asset protection will if done in a correct and timely fashion. Even worse, a very large liability insurance policy may actually make one an attractive target for litigation.

A moderate amount of liability insurance is thus recommended, especially when you consider that no asset protection plan will pay for a defense attorney when you're sued, although a liability policy generally will (at the same time, this attorney may be looking out more for the insurance company's interests than your own, which is why it's often a good idea for you to hire an attorney to watch over the attorney the insurance company provides you.)

A million-dollar liability policy does not mean much when you are sued for two million. With today's unpredictable, ludicrous jury awards, you cannot foresee what damages you may someday be forced to pay.

Then, too, you may discover that liability insurance is not your complete answer to financial security. There are countless policy exclusions, the inevitable loopholes that let your insurance company deny coverage.

Nor will your insurance company always defend a claim that is supposedly insured. The many 'bad faith' claims now pending against insurance companies prove this point.

Furthermore, a moderate insurance policy is a good way to divert a creditor from your hard-to-reach, “asset-protected” wealth to an easy insurance payout.

Liability insurance cannot take the place of a good asset protection plan, which you need to protect yourself from any type or size claim whichever country you live in.

Stay Safe!