Parents with children often worry when they chaperon other children. They worry about the child becoming ill or getting lost while under their supervision. However, they rarely prepare for the next logical step should that misfortune occur: being sued.
AN UNFORTUNATE EXAMPLE
A 2008 article in The USA Today, $700,000 Verdict Give Chaperones Pause, tells the terrible story of one family’s loss and a chaperon’s nightmare. Susan Sadler, a mother of a high school cheerleader from New Jersey, signed up to chaperon her daughter and a few other cheerleaders who were set to perform in the Hula Bowl in Hawaii. Shortly after arriving in Hawaii, one of the girls under Mrs. Sadler’s supervision was seen consuming alcohol. The next day her body was found on the hotel grounds.
After a lengthy battle, an arbitrator ruled that Mrs. Sadler was partially to blame for the teen’s death and ordered the Sadlers to pay $690,000 to the teen’s parents and estate.
IT CAN HAPPEN TO ANYONE
Once you have children, you are likely going to start hosting your children’s playmates and friends as they grow older. It does not have to be misbehaving teenagers to cause a major problem. Image if you let your 6 year old spend the night at a friend’s house. He was climbing trees in the friend’s back yard, unsupervised, and fell. If you had $20,000 in medical bills, let alone if your child was paralyzed or worse, would you not want those bills covered by the host?
HOW DO YOU PROTECT YOURSELF?
The first line of defense is your homeowners insurance policy. Each policy contains a liability section that would defend you and pay a liability judgement against you. Most commonly, policies offer 300,000 or 500,000 of liability coverage. However, in the case of the Sadlers, 500,000 would not be enough. For additional protection, you can purchase what is called a liability umbrella policy. The liability umbrella can be purchased in increments of $1,000,000.
HOW DOES AN UMBRELLA WORK?
A personal umbrella offers additional liability coverage beyond each of the underlying personal liability policies you have. Most commonly, it extends over both your home and auto insurance. For example, you have the following policies:
- Auto insurance: $500,000 of liability coverage
- Home insurance: $500,000 of liability coverage
- Boat insurance: $500,000 of liability coverage
The umbrella would add $1,000,000 of maximum coverage to each policy. Therefore, if you caused an accident in your boat, and received a judgement of $800,000, your boat insurance would pay the first 500,000 and the umbrella would pay the next 300,000. However, if the judgement was for $1.8 million, you would only have $1.5 million total and would be personally responsible for the additional $300,000.
HOW MUCH DOES AN UMBRELLA COST?
Liability umbrellas are very inexpensive compared to the potential payout. Typically, a $1 million umbrella runs between $180-200/ year depending on the number of underlying policies, types, and potential exposure.
With the high cost of medical care and the litigious nature of the country, virtually everyone should consider owning a liability umbrella. But in particular, families with children face the highest potential for needing the defense of an umbrella. To see how much one might cost you, give us a call or reach out to us.