A guide to protecting your luxury wardrobe collections

A recent Sotheby’s auction was billed as the “Visionary Collection of Joseph Lau,” but it wasn’t the businessman’s art or fine wine – rather, it was 76 luxury handbags. This phenomenal collection included six rare Birkin’s and a bronze Kelly bag that fetched more than $3 million. Other record-breaking sales such as Air Jordans and feted couture exhibits, are just a few examples of the rising passion and interest of luxury wardrobes. Whether you are purchasing such collectibles as an investment, to pass down to future generations, or to wear now, we want to make sure each piece continues to be only a source of pleasure for you. Our guidance below will help keep your cherished collectibles in mint condition and ensure they are properly protected in the event of damage or destruction. Navigating the acquisition process With the luxury market soaring, sadly, fakes are too, especially in the sneaker and luxury handbag categories. The New York Times recently reported on the increasing number of “superfakes”—knockoffs so convincing even the best-trained eye can’t always tell the difference. Being aware of this counterfeit market is important for a variety of reasons, not least because most policies do not protect against fraudulent purchases. Therefore, if you are buying from someone other than an authorized dealer, you’ll want to take the following precautions: Research the seller, including reviews and feedback scores of previous buyers. Beware of discounts; if the item or deal seems too good to be true, it likely is. Educate yourself about the product, so you can confirm relevant details and spot potential issues, such as flaws in stitching and embroidery. Storing your collection safely Humidity, leaks, and harmful cleaning products are just a few of the many perils lurking when your collectibles are displayed or stored away. Therefore, we recommend the following safekeeping best practices: Keep everything in a climate-controlled environment—the industry standard is 70℉, 50% humidity—to prevent damage to leather and fabric goods. Similarly, your closet should not be exposed to direct sunlight or heat sources. Keep unworn sneakers in roomy boxes, to make sure they maintain their shape. Most experts recommend clear plastic since they are stronger than the original box. Empty handbags of everyday items and help keep their shape by stuffing with archival fillers like a purse pillow or acid-free paper. Wrap exposed hardware in a lint-free cloth and remove detachable straps. Store bags and straps in their own breathable, neutral-colored dust bag or the original box. Store hanging garments on non-wire hangers in breathable bags made of muslin or polypropylene. Also, place acid-free paper between folded clothing items, particularly knits and lace shirts.Consider professional storage spaces that cater to owners of couture collections, their sole focus is to properly store and transport clothing, shoes, and accessories. Precautions for wearing collectibles In the event you have that perfect occasion to showcase your couture or cherished accessory, you should consider the following precautions beforehand: Refrain from using oily, alcohol- or perfume-based products on your skin, because contact with them could cause damage to the collectible. Be mindful when eating and drinking, especially staining hazards like red wines. Choose carefully what you place in your handbag and always consider bringing a portable handbag hanger, so you never have to place the bag on the floor. Before storing, dust both the interior and exterior. Preserving the beauty of your collectibles Sneakers that you wear do not need professional cleaning, but they should be kept clean with products that won’t fade their color. However, clothing items or handbags that suffer stains or other marks should be professionally cleaned by a company that has sufficient experience in caring for high-value fashion and accessories. Therefore, look for someone who: Specializes in couture and designer handbags and will outsource to a relevant professional for any work they are unqualified to do on their own. Offers a detailed inspection of each piece and an explanation of what the work will entail. Packages items in the appropriate materials, including acid-free paper and breathable garment bags. Protecting your investment Some insurance carriers offer special “wearables” policies, but often we recommend scheduling the items as part of your collectible’s policy. The relevant coverage can vary significantly, though most policies include theft protection, water damage, and other common risks. We suggest you keep a regularly updated list of every item in your collection and be sure to speak with your broker when you acquire a new piece. Also, be sure you check in with your professional to ensure your collection is properly covered. Whether you are drawn to a piece because of its unique features, designer, or storied history – this guide will help keep the original beauty preserved. To ensure your collection will be treasured for years to come, be sure you work with a professional with deep expertise in this luxury market. ...

Filing an insurance claim in today’s evolving market

As we continue to navigate this unprecedented insurance landscape alongside you, our consultative approach to handling your potential claim is more important than ever. With insurance carriers continuing to raise premiums or, worse, decline renewals of long-standing policies, we want you to better understand the broader shift around filing even the smallest claims, which can help safeguard your long-term insurability. As such, our recommendation is that you call us first to discuss any loss or possible claim. To state it as clearly as possible, we never want you to file a claim directly with your insurance carrier before speaking with your personal account executive or with our dedicated, 24/7 claims team (800-221-5830). As your risk management advisors, we will look holistically at your insurance program and offer guidance as to what we think is the best approach for your specific situation, and given the market, so that you can make the most informed decision. This discussion will also allow us to best support your choice and advocate on your behalf. To help you prepare for such a conversation, we have outlined the six key considerations we would explore together before you decide whether to file a claim: 1. Was the loss caused by a catastrophic event? When the answer is yes, our team will most likely advise you to file a claim. The industry codes for catastrophic events like wildfires, floods, major storms, and earthquakes, which allows carriers to isolate related losses and means they will likely not hold that claim against you when it comes time to renew your policy. 2. Was a third party involved? If someone is injured or another person’s property is damaged, we will most likely recommend that you file a claim to ensure your assets are protected. With that in mind, we encourage you not to pull out your checkbook at the scene of a crash in the hope of avoiding an insurance claim, nor should you ever volunteer to cover someone’s losses before consulting our claims team or your account executive. 3. If no catastrophic event or third party was involved, what is your tolerance for paying out of pocket? Our claims experts have begun to ask how much clients are willing to cover themselves. If the cost of replacing whatever you lost falls within this amount, they then generally suggest you do not file a claim. 4. How will filing this claim impact your risk management strategy going forward? Someone who files too many run-of-the-mill claims risks being deemed by insurance carriers as “no longer profitable.” In the end, carriers are businesses that need to earn money to ensure that they can pay out claims while being financially successful, and that has become increasingly difficult to achieve as weather-related events have increased in frequency and severity as well as costs of replacement and reinsurance have risen. Additionally, construction (material and labor) and auto repair costs continue to increase. So, when it comes time to renew, they are paying more attention to claims histories, especially for water damage and auto accidents. That’s all the more reason we might recommend you handle whatever you can on your own, thus preserving your insurance for catastrophic losses. 5. Is there any reason for you to choose not to file this claim? No doubt it is frustrating to pay for insurance and then choose not to use it for a covered claim. However, after our discussion, you may decide that it’s not worth filing the claim as it could impact your future insurability and once you lose coverage it is very hard and expensive to get it back. If that’s the case, we will recommend other adjustments that may help lower your premiums, such as increasing deductibles or assessing exposures and coverage to make sure you are paying only for what you need. 6. Can we help you be even more proactive about preventing future losses? As you no doubt know, an ounce of prevention can save you thousands in repairs. This is why we regularly educate our client’s around proper maintenance. It’s crucial for you or your caretaker to do things like caulk around windows, clear drains and gutters of debris and check that the sump pump is operational. Taking the time to walk around your home and find the spots where a small investment will prevent a loss that in turn will save you money and effort in the future. And we are happy to provide further guidance and best practices if there is anything we can do to help in this process. Our primary goal is always to protect you and your family's long-term interests. This is why we will work together to guide and advocate for you throughout the claims process. And it’s why we hope your first step will be a call to our team and not the carrier. We can advise on the steps required to handle your immediate loss and keep you insured long-term, as we have done for clients for more than a century. ...

It’s never too early to talk about risk with your children

Parents understand the importance of teaching their children essential life skills, from safe driving to financial literacy, but many might not think to include crucial lessons around risk management. Yes, you counsel to look both ways before crossing a street and to be wary of strangers, but how about conversations around the potential liability and repercussions with certain behaviors and actions? As risk management experts, we think a lot about how best to educate the next generation about these topics and regularly help families do just that. To encourage you to do the same, we have provided some ways to help you educate your children about risk management. Educating Tweens & Teenagers about Risk Management It is never too early to make kids aware of the fact that their actions can impact the entire family—both your assets and reputation. But this age range is when their choices begin to matter. To that end, you want children this age to: Understand the perils of social media The majority of American children are already carrying smartphones by the time they are 11, and kids even younger use social media. New phone or new account, this access is best ushered in with a conversation about the consequences of posting something defamatory or bullying by text. Helping your kids understand that nothing they put or send online is private, and that unfortunately, you can be held responsible for all of it. (This article details why it’s important for the whole family to be careful with social media.) Avoid throwing out-of-control parties When kids hold parties while parents are away, they most likely don’t know that their parents could still be held responsible if something goes awry. That’s why it’s important to tell your children about “social host laws,” which hold the entire family responsible for incidents involving drugs and alcohol at their home, even if the parents were unaware. We also recommend you warn children against drinking games because if someone gets injured or dies from alcohol poisoning, a court could find they encouraged risky behaviors. (Here are some suggestions on how to mitigate the risks of teen drinking.) Practice defensive driving The day your child gets their learner’s permit is the day you should start accentuating the perils of driving, and, in particular, driving while under the influence. But you also need to teach them how to act in the event of an accident, even a minor one. For example, even a casual “sorry” could be seen as an acknowledgment of fault, or an admission like, “I wasn’t paying attention.” (See this article for more tips post-accident.) Educating College Students about Risk Management They may still be in school, but your child is technically no longer a minor. And that means their actions can have more significant consequences. As such, your college-aged child needs to: Understand that they are now more responsible for their actions Up until now, you have likely had ultimate responsibility in most situations but now is when you can help with the transition. For example, educating your children to report any broken items in their “new” residence in a timely manner will minimize their risk of having to pay for any of these damages. Remind them that though the car they are driving is registered in your name, they still will be implicated if anything goes wrong while they are behind the wheel. And alert them to the aforementioned risks of hosting a party, particularly those connected with underage drinking. Understand that their family may still be liable for what they do Though your college student may be away from home, as long as they remain your dependent you remain accountable for their actions. This liability extends beyond the obligations that come with signing or co-signing a lease. (In fact, parents might be liable even if it is only the child’s name on the lease, should a court determine them to be in your custody.) Parents have also been held responsible for their children’s involvement in harmful, or hazing incidents. Be especially careful when studying abroad For many students, a semester abroad is a rite of passage. To help ensure it is a wonderful experience, we recommend making a copy of all important documents to ease replacement in the event they are lost or stolen and providing your child with a list of local contacts—family as well as school administrators—who can act as local advocates in the event of an emergency. Also, it’s worth reminding them to always follow local protocols and laws. Your children are fortunate to have parents who are concerned about their ongoing welfare and willing to be engaged in helping them navigate risks. As they say, it takes a village, so as always, we are available to assist in this education process at any stage of your child’s life. ...

The impact of natural disasters on the insurance industry

With predictions of another season of significant weather events in the air, it’s important for us to give you an update on the current insurance landscape. The insurance industry is constantly evolving due to many factors and our goal is to keep you fully informed so you can better understand what is happening, why, and what you can do to mitigate the impact on your insurance program. The insurance industry is in the midst of a correction that largely began in California a few years ago and continues to spread across the country, particularly to regions most susceptible to wildfires, hurricanes, and other catastrophic climate events. Despite this, Americans continue to move into these areas, and that has put a serious strain on insurance carriers, which, in turn, is increasingly impacting even less-vulnerable areas. In the past five years, the U.S. has experienced 89 weather-related events that caused at least $1 billion in damage, and that trend is not abating. In 2022 there were 18 separate billion-dollar events making it the third most costly year on record for hurricanes, freezes, severe storms, wildfires, and floods. Floods, in fact, are the country’s most frequent and costliest natural disaster, now occurring often in areas not previously considered to be high-hazard ones. All of which means premiums continue to climb higher, non-renewals are more common than ever, and it is increasingly difficult to obtain coverage, wherever you live across the country. This is no doubt, frustrating news to clients but does have a silver lining: Several years of navigating this market has made our team extremely well equipped to guide you through its challenges and find creative solutions best fit for your unique needs. Three factors driving the market correction Insurance carriers engage in a constant struggle to sustain an economic model that allows them to pay the broadest number of claims. This moment in time remains a particularly tricky one for them because … 1. Capacity is low. Today’s carriers are significantly overexposed after decades of securing increasingly expensive homes in areas that have borne catastrophic losses from weather events. Even premiums that may seem unreasonably high to individual policyholders do not sufficiently cover carriers’ aggregate risk. Not only has this overexposure made carriers tighter with rates, but it has also made them more likely to refuse coverage altogether. This is the case in affected and unaffected areas alike, especially for owners of older homes that are not fitted with the latest protections or do not meet current building codes. A similar reluctance is occurring in areas like New York City, where aging infrastructure makes carriers wary. 2. Reinsurance costs are high. If carriers were left to pay off losses solely with the money they took in from premiums, insurance would be unsustainably expensive. That’s why they support their own exposure with reinsurance, essentially, coverage for losses they can’t cover on their own. Reinsurance guarantees carriers have enough cash no matter the cost of a loss. That said, the current combination of increased catastrophic events and heavier concentrations of multi-million-dollar homes in vulnerable areas impacts both insurance and reinsurance carriers. In fact, so drastically, reinsurance is now much costlier than before. When those rates rise, it makes it that much more complicated and expensive for carriers to provide adequate coverage for clients. There comes a tipping point when reinsurance becomes just too costly, especially government-regulated ones that are required to carry a certain surplus. 3. Inflation is making everything worse. The cost of replacing almost everything is significantly higher these days. Labor and materials are at sky-high prices because of ongoing supply-chain issues and skilled-worker shortages. Vehicle repair costs, to take one example, have risen steadily, and faster, in the past two years. The latest premium appliances may be more technologically advanced, but that also makes them more expensive. Much more basic materials such as paint, lumber, roofing and plumbing are pricier, too. And these costs continue to climb higher after a catastrophic event which puts pressure on available resources. Smart risk management strategies We continue to provide innovative solutions to help protect you and your belongings. But we also want to put you in the best possible position to ride out these challenging times. Specifically, we recommend that you… Do everything in your power to avoid a loss. Yes, accidents and climate events will unfortunately happen, but you can better prepare your home and property for both. Simple pre-emptive steps such as creating a brush-clearance zone in a wildfire-prone area or undergoing a windstorm mitigation inspection in storm-heavy areas are crucial. We can also help you schedule walk-throughs with professionals, who will spot potential trouble areas and recommend preventative measures. Likewise, we encourage you to embrace the available technology to minimize the likelihood of water loss or wind damage such as water leak detection devices and more. Protect your insurance coverage. A history of previous claims, even a short one, is often a strong predictor of premium hikes and non-renewals. It can also make it more difficult to secure new coverage. Thus, we encourage you to speak with your insurance professional prior to making any potential claim, so we can help you decide how best to proceed. (In some cases, that means taking on the expense yourself if possible.) Choose coverage strategically. If, as we suggest, you plan to file claims only in the most onerous scenarios, you can lower premiums by choosing higher deductibles. Other situations may call for you to self-insure or partially insure. For example, if your home has the best-possible wind protection and you do not carry a mortgage, foregoing wind coverage to make the premiums more reasonable might be a viable option. Contact us before signing a contract on a home: If you are considering buying in a risky geographic area, your broker can tell you if you will be able to purchase coverage—and whether the cost will be prohibitive. We understand that this is an extremely challenging market, but we are confident that we can help guide you to make it more manageable. If you have any questions about the current state of the market or whether your personal portfolio is adequately protected, please know we are always here to help guide you and your family.   ...

Risk management takeaways for successful families

The most successful family enterprises, namely those with single family offices whose wealth results from the private ownership of a business, have managed to sustain significant holdings through multiple generations. This feat ­necessitates navigating many different risks over long periods of time which offers valuable risk management lessons for any successful family, enterprise or not. Recently, we conducted our Family Enterprise Risk Index, a landmark survey of 145 family enterprises across the country, to better understand their current outlook on risk, along with what risk management practices are in place. We compiled the findings for the most relevant lessons that can help you and the many successful families, who are not part of a family enterprise, better improve their risk resiliency. The learnings below are based on our comprehensive analysis and include best practices for risk management that all high-net-worth households should consider. Takeaway 1: The person who oversees risk management is too often not a risk management expert. Our index uncovered that most of the family enterprises surveyed do not employ a risk management specialist, despite the challenging and changing landscape. In fact, 70% put risk management in the hands of an executive who also provides services such as tax preparation, bookkeeping and administration, insurance purchasing, investment management, philanthropy and trustee services. While we certainly don’t expect you to hire a full-time risk manager, it is still important to note based on this finding, that whoever is working with your insurance broker, whether that is a family member or an advisor, likely has many other tasks on their plate as well. From our experience, that means things like annual reviews, scheduling collectibles and updating beneficiaries may be delayed or could be overlooked. The solution: We send out regular communications about risks and insurance matters to keep you informed and we also encourage setting up annual reviews with your insurance advisor. Having an expert that you rely on, and that you can consult regularly, is invaluable. Takeaway 2: Family risks and educating the rising generation are not necessarily priorities. Among the most concerning findings of our study: more than 76% of respondents had no systematic or regularly scheduled risk-review process for the family. Furthermore, 41% conducted reviews on an ad-hoc basis only, and another 30% failed to conduct them at all. This leaves the family (and the enterprise) vulnerable. Even more concerning, of  those respondents that conduct either an ad-hoc or annual risk review, we found that 63% do not have an education process in place for the rising generations. And yet, as risk experts, we know that children, especially teenagers, bring specific challenges to the intergenerational table: problematic social media presences, unsupervised parties, car accidents, even issues related to apartments or hazing incidents in college. If such a lapse in focus occurs even in enterprises with the most to lose from it, we feel it is essential to remind every one of our clients to find time to discuss risk as a family. The solution: Rising generations need to be educated about risk and the potential impact of their indiscretions not only to their own lives but to your family’s well-being, too. In our experience, these conversations are the best way to improve risk resiliency. Families should meet each year to review coverage and make sure all is accounted for. (Your insurance advisor will always be happy to lead this conversation.) Likewise, parents should discuss with their children the various exposures they can, unwittingly, subject the family to, periodically at the dinner table and pointedly around life milestones, such as getting a driver’s license. Takeaway 3: Even when families do talk about risk, they often miss key vulnerabilities. Of the eight family-related risk areas surveyed, most respondents only had a plan in place for managing domestic staff. In fact, just around one-third of respondents had a plan in place for all other situations, which include concerns like travel emergency preparedness, emergency preparedness for natural disasters and family reputation management. These findings could potentially leave families within the enterprise vulnerable to a number of risks. The solution: When you are assessing your risk with family members or advisors, be sure you are looking holistically at all areas of risk. Additionally, confirm your insurance program adequately considers your current situation and covers all your exposures. Has your property become more susceptible to natural disasters? Have you sufficiently shielded yourselves from reputational damage? Are you covered if someone gets into trouble or falls ill while traveling abroad? These days, every successful family should understand that they are navigating a more diverse and complex set of risks due to the increase in natural disasters, cybercrimes, public health crises and the like. Even those who you would expect to be best positioned to deal with the evolving landscape, such as family enterprises, fall short in some areas. We can all learn a lot from their reality. Please contact us with any questions or concerns about your own risk management program. ...

Four ways to improve your life insurance program

Even as some parts of the country slowly begin to “re-open,” many of our clients continue to spend far more time at home than usual. We’d like to propose a home activity that offers a potential benefit to both your finances and your sanity: reviewing your insurance program. Yes, we know … exciting. And maybe because we love what we do, it is to us. But either way, a relatively small effort could lead to objectively big advantages, via the potential to lower premiums and maintain peace of mind. Here’s what you need to do. 1. Review your collections. There are three ways to insure a valuable collection, whether it is art, wine, or baseball cards: by listing each piece individually on a schedule, by obtaining a single blanket policy, or with a hybrid of the two. If your policy is itemized, make sure: • No pieces are unlisted, particularly recent purchases. • Nothing needs to be removed (that is, you still own everything the list says you do). • The value of each item is up-to-date. (Note: Many galleries and appraisers are working virtually these days, should you need a consultation.) If you’ve insured the collection as a whole under blanket coverage, make sure: • No individual piece exceeds the maximum per item limit stated in the policy. If, say, the value of an artist’s work has skyrocketed, you need to consider moving it to a separate scheduled policy. Your broker can help you here! • The listed overall collection value reflects current value. 2. Find time for your annual review. In general, your broker will review your portfolio annually which will help protect you in the event your lifestyle or needs have changed over the year. For example, you might have forgotten to tell your insurance broker that little Susie is officially licensed and on the road! These conversations are crucial to risk management, and luckily, all you need to do is answer our questions. Here are some things that might be discussed during this review (hint: you can prepare your answers ahead of time): • Is there something, such as a car you sold, or someone, such as a young driver who no longer lives at home, be removed from the policy? • Have all recent purchases been protected—say, a new piece of land or a home purchased without a mortgage? • Are there any other risks that may need proper coverage, such as mold or cyber issues—or whatever worry that keeps you awake at night? 3. Review your life insurance. With so many new health concerns to consider, now is a smart time to revisit your life insurance program, including disability and long-term care. Clients are often surprised to learn that a policy they believe to be guaranteed is, in fact, not. Similarly, be aware that newer policies may better suit your current needs, which tend to change over the years. Here are a few topics to discuss: • What coverages do you have in place and how much is their total value? When is it all set to expire? • Do any changes in your lifestyle or life objectives necessitate exploring updated insurance options? 4. Review any information that can lead to lower premiums. Many insurance companies reward policy holders for taking actions that minimize risk. You may not be able to install new systems now, but determining what you might want to put in place and who you might contract to do so when you can, could pay off for you later. Consider: • Adding new protections to your home, such as a water leak detection system, a temperature monitor linked to a central fire station, or a permanent backup generator. • If you’ve already done so, please let us know so that we can alert your carrier. Additionally, small lifestyle changes could mean savings in your premiums. So let us know if: • You had been renting out a home but are no longer. • You no longer own a home, car or boat that had been insured. • You no longer employ household staff. (If this is the case, you can eliminate workers’ compensation and employee practices liability insurance.) These are unsettling times for everyone, but we remain steadfast in our goal: to help decrease your worries. Although reviewing the above steps may not be high on your to-do list today, they can help continue to properly protect your family and belongings during and after these uncertain times. As always, we wish you and yours health and of course, safety. ...

The home buyer’s guide to insurance

Buying a home is an important investment that requires careful consideration and planning. Whether it's your first home or another vacation property, as you embark on the home buying journey, it's important to consider how insurance fits into the process. Issues like climate change and aging infrastructure have transformed the homeowner’s insurance market, making it harder to obtain a policy and more expensive to keep one in place. As such, it behooves potential owners to consider insurance options before committing to a home, no matter how great the architecture or location. By incorporating these five simple steps into your real estate purchase, you will make a more informed decision while house hunting and better protect your dream home once you have the keys. 1. Talk to your insurance broker before you sign the contract.Securing a homeowner’s policy is harder in today’s challenging market, especially if you are buying in a region prone to severe weather events. Before you submit a bid, contact your broker to get a location check so that they can let you know if either the specific address or general area is prone to insurance-impacting issues. Along with climate concerns and any claims history, carriers are looking at the type of home. For example, historic ones (infamous for costly rebuilds) and condominiums (known for leaks) can be less desirable than newer builds with up-to-date codes. You’ll have the results of your location check within a week, along with approximate premiums if coverage is possible. And if carriers have concerns about the property, you will find out what obstacles stand in your way, such as roads in fire hazard zones that are too difficult for fire trucks to access or a high likelihood of flooding. While this call is important for every buyer, it’s especially crucial for those buying a house sight unseen, as it’s another check against pitfalls down the road. Bonus tip 1: Before you make an all-cash offer or opt to forgo the mortgage clause in the contract, consider this: Banks won’t lend money to anyone without insurance (unless the buyer has permission to self-insure), and that clause provides some protection if you cannot otherwise obtain a policy. Once you sign a contract without a mortgage clause, you will have to go through with the sale regardless or forfeit your down payment even if you can’t get a policy. Therefore, an early call to your broker could help prevent such a dilemma. 2. Negotiate with insurance premiums in mind.What you learn from that location check can be used as leverage in your ongoing purchasing negotiations. In an area where insurance is hard to obtain, a seller might be willing to pay for any prerequisites to coverage—a backup generator or hurricane shutters, perhaps even fire-resistant landscaping—or reduce the asking price to compensate for the work you will have to do yourself. Either way, you can avoid incurring the additional costs connected with making the house insurable. 3. Stick with your trusted broker.Often, real estate agents suggest you talk with their insurance person to hurry the process along. In fact, that call might have the opposite effect as things can quickly get complicated when multiple brokers make inquiries to the same insurance company on behalf of the same homeowner. Here’s why: The manner in which a broker presents the property and homeowner to carriers greatly impacts the chances of obtaining insurance. And unfortunately, if a carrier declines to cover a property as a result of incorrect or badly-positioned information, your trusted professional’s hands are tied—it is legally impossible to overturn the decision. Bonus tip 2: If you are planning a major renovation before move-in, it is important that your broker knows, so they can speak to the carrier to incorporate whatever additional coverage might be necessary. Your broker should also review the insurance sections for all contracts with contractors and add any relevant certificates of liability and worker’s comp to the homeowner’s policy. 4. Don’t let cost be your sole consideration.Many people, after sparing no expense on their new house, suddenly become cost-conscious when they turn their focus to insurance. While that is understandable, you could be hurting yourself down the line. When comparing policies, you want to make sure your carrier is in good financial standing and is known for paying claims. Also ask, in the event of a catastrophic loss, whether they will replace your home to the same standards or simply fix it with whatever material is least expensive? Ultimately, the choice is yours but it’s worth knowing what you are —and are not—paying for. 5. Add as many layers of protection as you can.In the end, insurance carriers want to do everything possible to prevent loss, and it is in your best interest to consider their recommendations for how to do so. These might include clearing areas of brush, installing shutters, or strapping items down prior to a storm. Likewise, they will often suggest you install smart safeguards, from low-temperature sensors to water leak detection systems to centrally monitored fire and burglar alarms. We want you to revel in the excitement that comes with purchasing a new home. You can always rely on us to make the risk management process that goes along with that undertaking as simple as possible. ...

Protecting yourself in an ever more litigious world

Accidents happen. Even if you do everything to maintain a low profile— adhere to the speed limit, keep plenty of distance between you and your neighbors—there is still a rising chance that you will be the target of a costly lawsuit whether or not you are at fault. This is even truer for affluent individuals. To help you better understand the risks and mitigate any losses, we asked two of our Private Client team leaders, EVP and executive managing director, Cindy Zobian (CZ) and first vice president Steven Kent (SK), some frequently asked questions around personal liability in today’s ever litigious world. Why is it important to talk about personal liability? And why now? CZ: Simply put, people are more likely to sue one another today than ever before. Yet, we still see successful individuals and families who do not have enough personal liability coverage. These cases often involve auto accidents or injuries that occur on someone’s property, but claims can arise in nearly any situation. For example, a teenager who is accused of cyberbullying or a golfer who doesn’t yell “fore!” and then hits someone with a wayward shot. Expect their victims to sue, particularly if they perceive the other party to be affluent. SK: That’s true. I think it’s fairly common knowledge that affluent individuals are targets for lawsuits. However, you don’t have to be driving a Maserati to be targeted. There are so many ways for someone to conclude you are successful. Social media makes it easier for people to determine that you have money and would be worth the effort to sue. For example, if your profile has pictures of you standing in front of your Malibu mansion, you are more likely to get sued than if you’re standing outside a modest ranch. It’s important to be mindful of what you are posting publicly on social media. What if my lifestyle isn’t conspicuous? Will I need less liability protection? SK: Not necessarily. The affluent are more likely to live, work and play around people who own things that are costly to replace if damaged. CZ: Exactly. For instance, in one extreme case, a fire broke out in a client’s apartment in Manhattan. Their neighbors’ apartments were damaged. In fact, there was considerable smoke damage in one unit, which affected their neighbor’s priceless art and rare antiques collection. In addition to the damage, the residents expected to be put up in nice hotels while the repairs were being made. Our client’s insurance company ultimately paid tens of millions of dollars in claims. But most high net worth people are properly protected, right? SK: Excess personal liability insurance, often called “umbrella” policies, cover you against claims of injury to people and damage to property. Typically, your auto and homeowners’ policies have coverage included up to a certain limit. Umbrella policies provide additional protection over and above that limit. When we meet new clients it’s not that uncommon to find that they have very little or no umbrella coverage. That’s why it is so important to have a conversation about this. CZ: Accidents happen. For example, a few years ago, one of our clients had a relative visiting from out of town who borrowed his car. Unfortunately the relative was not familiar with our roads and ran a stop sign, causing a bus to swerve onto an embankment and roll over. While there weren’t any passengers on the bus, there was a pedestrian riding a bike on the embankment who sustained serious injuries. This is an extremely unfortunate case but the bottom line is that while our client was not actually driving the car, he was still sued. How do these types of situations generally pan out? CZ: A few cases go to trial, but most are settled privately. We’re also seeing larger settlements regardless of who was at fault. We had a client hit a pedestrian who was texting while he was walking across the street. The driver, our client, had the right of way. Regardless, his insurance company ultimately paid out a six-figure settlement. Is there such a thing as too much liability coverage? CZ: We get this question a lot which is why we developed our proprietary tool, What’s My Liability. This tool calculates a suggested range of liability coverage. There’s no magic number to determine the correct amount because it really depends on the value of the assets that are being protected and the individual’s risk tolerance. We strongly suggest that you talk to a professional for further guidance. SK: For most of our clients, I’d say that if their limit is below $5 million, they are effectively uninsured. You can get coverage up to $50 million with little hassle. We do have a few clients who are in the public eye and are more concerned about being magnets for lawsuits. For reference, those clients carry more than $100 million in personal liability coverage. Any last thoughts? CZ: It’s easy to get this wrong, and the ramifications can be serious and expensive. So it’s always worth a 10 minute chat with a professional to make sure you and your family are properly protected. We’re here to help! ...