EyeWorld is the official news magazine of the American Society of Cataract & Refractive Surgery.
Issue link: https://digital.eyeworld.org/i/387844
OPHTHALMOLOGY BUSINESS 120 October 2014 by W. Ben Utley, CFP® and Lawrence B. Keller, CFP® Umbrella insurance: Malpractice coverage for everyday living might not apply, as may be the case when you are traveling. In addition, an umbrella policy might pay a proportionate share of a claim even if your basic liability A s a physician, you have a bright red target painted on your back with a big dollar sign in the bull's eye. Everyone wants a piece of you. While there's nothing you can do to keep them from suing you, you have plenty of options when it comes to protecting yourself. At work, you have malprac- tice insurance, but what can you do about liability you might incur throughout the course of your life outside your profession? If you crash your car into someone, your auto insurance will cover you. If someone trips and falls on your property, your homeown- er's insurance covers that. But what if something really bad happens? What if the defense and the damag- es are substantially more than the limits on your policies? You can pay the costs out of pocket if you have the resources, but if you don't, the person who sues you may attack your future earnings to satisfy the liability. Open your umbrella To protect yourself, what you need is something like malpractice in- surance for everyday living. In fact, there is a special form of property and casualty insurance that's layered on top of your homeowner's and au- tomobile insurance policies. Since it covers liability "above and beyond" that afforded by your base layers, it's known as "umbrella" insurance. This "excess liability insurance policy" sits on top of your other coverage and picks up the liability where the base layers leave off. It can pay for your legal defense and cover the damages up to the limits of the policy. For example, let's say you are implicated in a motor vehicle acci- dent and found liable for a bodily injury claim totaling $1,500,000. If your auto policy's liability limit is $500,000 and you did not have an umbrella policy, you would be expected to meet the remainder of that claim ($1 million) yourself. However, if you had a $1,000,000 umbrella policy layered on top of your auto coverage, you would be adequately protected since your base policy would pay the first $500,000 and the umbrella policy would cover the rest of the claim. Umbrella insurance may also protect you from losses not covered by basic liability insurance. It often covers damages for unusual occur- rences including personal injury losses due to libel, slander, wrongful eviction, false arrest, and invasion of privacy. Your umbrella liability pol- icy might pay for damages incurred in situations where coverage from auto and homeowner's insurance