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Julie (00:05):

I am so excited to have John Pugliese and Kimberlyn Pak today with me discussing navigating liability limits with our high-net-worth clients. And what I'd really love today is to pick your brains about maybe some pitfalls, maybe some coverage enhancements that our clients need to be thinking about. But before we kind of kick it off, I thought I'd kind of share a personal story of myself—and this is a personal story to me.

(00:37)

I have two boys and several years ago, our youngest was a new driver and he and my husband were driving down about an hour and a half away to watch my older son play soccer and just like it does on any interstate, all of a sudden traffic just stops on a dime, right?

And he was following my husband, because he was going to come back earlier that evening. and my husband veered off to the shoulder to not rear end the person in front of him. And my son being inexperienced—he wasn't on the phone, he wasn't being distracted—he swerved not to rear end my husband and overcorrected and hit my husband and threw him into the woods. And then my son's car flipped bumper to bumper three times right in front of my husband. And there was no negligence. He wasn't goofing around. He wasn't preoccupied. He wasn't on the phone—and accidents just happened.

(01:33)

I mean, that story ended up having a good outcome that neither one of them were injured. It was the only two vehicles in the accident. We could have been sued by multiple people because he ultimately caused the accident, but yet no one was injured. We had two totaled cars, but the benefit is that it was just them that were in the accident.

(01:59)

Those types of things happen. Slippery roads happen. Ice happens. Things that are completely out of our control happen, that then we can be the cause of something. And so I think it's really important for people to understand that it's not just someone else's fault or someone else slipping or someone else doing that. It could be something that we could do as a pure accident, but yet we could be liable. I just tell that story because it's a personal story of mine, I can claim it, I can tell you that it was mine! But I think that's those types of things that we just need to tell our clients to be cautious because it could be something that is completely a true accident, so to say.

(02:44)
I'd love to kind of get down to basics. I know that I've been in this business for decades—I'm not going to say how many decades—but I've in this business for a very long time. I know that this has been kind of an evolving type of coverage and evolving type of exposures that our clients are having to deal with. Kimberlyn, I'm going to actually start with you, and I want to kind of get back to basics and really kind of find out what exactly are the exposures and the things that we need to be speaking to our clients about. What are the things that maybe they haven't thought of before that they should be thinking about?

Kimberlyn (03:26):

So, when you think about liability, the most basic thing you think about is a trip and fall scenario, but there's a lot of other things that can happen that someone could be held liable for. You're living in a multi-unit building, for example, you can have an AC unit that's clogged and it's trickling water down to all your neighboring units. Maybe you don't find out about it until extensive damage is done to the neighbor below. Something like that would fall under liability. Something like having vendors come into your home, or even guests coming into your home having a dinner party. Are you serving alcohol at that dinner party? What happens if a drunk guest gets into a car accident on the way home? That's an exposure that not a lot of clients think about. So, there's a lot that goes into thinking about what you might be held liable for – so really taking a look at the limit that you have and your exposures, is definitely an important thing to do.

Julie (04:19):

John, do you have anything to kind of add to that?

John (04:22):

I think Kimberlyn hit the nail on the head with a few of those comments. It's unfortunately a very litigious world that we live in— in certain parts of the country more than others, so that's definitely a factor in thinking about this—but some of the traditional thoughts are, it's the automobile accident, it's the slip and fall, it's the dog bite. People don't realize their nice little pet that potentially could be an exposure to them. Obviously, we can't predict what an animal's going to do given any potential situation that they're put in.

The property damage one I think is a huge piece, and I think an often forgotten “traditional”, I guess best way of saying it, property damage loss, which Kimberlyn mentioned, the condo building, the co-op in New York City is the example that I give classically of: “You leave for the weekend to go to your second home, which many of our clients do. You leave the water running completely innocently, and all of a sudden now you've damaged four multi-million-dollar units below you, and who's liable?” Well, that's an easy conversation to have with a client. So, those are really kind of your traditional, I think most people think about that, but that world continues to evolve daily.

Julie (05:34):

Well, I know that each one of us probably have multiple examples of this, unfortunately, right? Because if we have examples, that means that our clients have at some point been part of a litigation at some point. But, do either one of you have a recent example or kind of an example of what you've had to work through with some of your clients?

Kimberlyn (05:55):

I do, and it's something that a lot of our clients, even a lot of our colleagues, they do this and it's not something that you really think about. It's golfing! Lots of colleagues, lots of clients, they go golf, they entertain business affiliates with golfing. It's a very common thing. One thing that they don't think about is what could potentially happen if you're hitting a golf ball, and that golf ball doesn't go where it's supposed to go and instead hit somebody else? I have seen claims where someone's on a golf field, someone yells “four!”, someone's down on the other side of the field, and I don't play golf – so, if it's not called a field, I'm sorry! But they hit the ball and it hits somebody else in the eye, they lose their vision. What happens here? That's something that nobody really thinks about, and anytime you're partaking in a sport activity, there is a certain component of liability involved, so it's something to be aware of. That's one of those things – you can’t control it, but accidents happen. So, it's important to know that at least thank goodness I have this level of liability on my insurance policy.

John (07:03):

Kimberlyn, I think that's a really good one to bring up. I've been on the golf course and I've seen where a ball can be scattered and things can happen. I've seen many a close call over the course of my life.

Julie (07:14):

I've actually scattered a ball before! That's where my ball goes, John! So go ahead, go ahead with your story, sorry.

John (07:22):

We've all been there! We've all been there, but it is a real liability for sure.

Julie (07:26):

John, can you talk a little bit about the legal defense? The carriers that we work with, the legal and the defense cost are typically outside the policy limit, and that's one of the reasons why it's so important to which carrier our clients choose for their liability coverage. If it be the legal defense or the limits that are offered. Can you share a little bit more about that piece of it, and what you've come across?

John (07:57):

Inevitably, you might meet somebody, and they say, “yeah, I have umbrella insurance”, and that's all well and good, and that's fantastic. They're one step ahead of the game, they've got excess liability – they’ve thought it through, they've had a conversation. Maybe another advisor's brought it to their attention in the past. But when we're talking about umbrella insurance or excess liability insurance, whatever, we're talking about liability insurance in general, just like any insurance product, they're not all created equal. So, the conversation is even if the accident occurs, no matter if that lawsuit is brought upon you, the insurance companies that we're doing business with on the high end of the marketplace, are going to defend you at no cost to you. Even if that claim or that lawsuit is completely fraudulent. That is a huge topic of conversation. And if god forbid, whatever the claim is legitimate and you're found to be negligent and you are on the hook for whatever the payout ends up being, your insurance company is going to pay up to whatever that limit may be.

(08:59)
That's not including all the defense costs, that we all know attorneys are extremely expensive in defending you. So many, many insurers that are not on the high end of the marketplace are basically going to bake that number in of what they defended you for. And then whatever's left, is essentially your settlement option. The other piece of it is most cases you're able to, it depends on contract to contract, bring in your own attorneys if you'd like to have them defend you as opposed to whoever the counsel may be that is provided by the insurance company. Now, obviously checking contract and they all change and everybody's different, but that's another a huge benefit. If you have a trusted attorney that you want involved in the process, even if they're not the one handling it from the entire process, they're going to work hand in hand with the insurance company. So, a lot of benefits that come with the carriers that we do business with.

Julie (09:53)

That's why it's important to be able to have a broker that you can call and get recommendations from and education. I always tell my teams that 80% of our job is education. We deal with very successful smart people, individuals, families, that they've gained their wealth for being probably pretty intellectual. And one of the things is I figure if we can teach them and educate them about what they have and what they don't have, they can make the educated decision about what is a good choice for them. But our job is educating what the coverages are and what are the options out there, that are available.

Julie (10:37)

You know, one of the things—like I mentioned before with our family's car accident—you can't control the uncontrollable, but what are some of the things that you could maybe give a quick recommendation of? One last thought of what our clients should be thinking of?

Kimberlyn (10:59):

Social media! Social media is a huge, huge thing that our clients should be thinking about. It's very instantaneous. A lot of folks have children who will post everything and anything. They post about things that happen in their daily lives, maybe interactions with other friends that they have at school, or maybe people that they don't like from school. That's how it all starts. And then from there, they could be getting sued for something like slander, something like libel. Maybe they wrote something in the comments section that wasn't necessarily true, and it just paints the child in a negative light. Very, very important to look at these types of things, and make sure you have these conversations with your kids about what they're posting on social media.

John (11:42):

Social media - it's the evolving risk that seems to change daily. I'll be the first to say, I can't keep up with everything that's available, but as a family, number one, our clients have to realize that it's their entire household that is potentially an exposure to them. And as Kimberlyn mentioned, our children have cell phones sitting in their hands regularly. Unfortunately, anything that they post that could be seen as negative, could end up being an exposure to the entire family. The one thing I would say is just being able to have those conversations and keep open lines of communication. I know we all try, I'm a parent myself. We all try to control, and understand, and have a pulse on what's going on in our family's lives and in our children's lives, but it can change instantly. So, just knowing that these exposures are continuing to evolve and that it is something that could be an issue. Just knowing that these are continuing to evolve exposures and keep it on our radar.

Julie (12:46):

We need to wrap up here. But I want to thank you all, both so much for giving us your insights and your expertise. I've always said that it's great to hear another person's perspective, and I can always gain little tidbits and nuggets of knowledge from other colleagues, and so I did that today. So, thank you so much for both joining me in this podcast! If anyone listening wants to learn a little bit more, we do have a website you can go to, it’s called www.whatsmyliability.com.  I recommend that you go there, reach out to any of us, and we can help you navigate some of those conversations. And as always, stay informed and stay protected. We'll see you guys on the next episode. Thanks so much!

Host: Julie Rison – Director, Strategic Client Relationships

Guests: John Pugliese – Senior Vice President, Sales Team; Kimberlyn Pak – Senior Vice President, Client Service Team

00:05 – Welcome & Introduction
Julie introduces the topic of navigating liability limits for high-net-worth clients and shares a personal story about a family car accident that underscores how accidents can happen—even when no one is at fault.

01:33 – The reality of liability risks
Accidents—whether caused by slippery roads, ice, or everyday mishaps—can quickly turn into major liability concerns. Even a true accident can leave individuals financially exposed.

02:44 – Common liability exposures
Kimberlyn outlines key liability risks that high-net-worth individuals may not consider, including property damage in multi-unit buildings, vendor-related injuries, and serving alcohol at social gatherings.

04:22 – The evolving nature of liability risks
John discusses the traditional and emerging liability exposures, from dog bites and home water damage to new threats associated with social media and online activity.

05:55 – The golf course liability case
Kimberlyn shares a real-life liability claim involving a golf accident, illustrating how even leisure activities can lead to significant financial exposure.

07:26 – The importance of legal defense coverage
John explains why legal defense coverage matters, how different insurers handle liability claims, and why choosing the right carrier can make all the difference.

08:59 – The financial impact of inadequate coverage
Julie, John, and Kimberlyn discuss real-world examples of how clients faced costly lawsuits due to insufficient liability protection.

10:37 – Final takeaways: Protecting against evolving liability risks
Kimberlyn highlights the growing risk of social media liability, emphasizing that what family members post online can create significant legal exposure.

12:46 – Closing thoughts & resources
Julie wraps up with key insights and encourages listeners to visit www.whatsmyliability.com for more information on navigating personal liability risks.