Personal Liability Concerns/Fears Over Everyday Activities

[Explore]

I'm the same way Luckydude. I have an insurance/risk management background and identify risk wherever I go and then try to minimize it. It's one of my quirks that I accept even though I wish I could just enjoy things more and not see the risk in them.

 

[Souschef]

We all like to think that we know people well enough to be able to trust them, but when it comes to money (or prospect of money from lawsuit), one never knows.

I may have shared this story on the board before. Short version: a family friend pledged his assets to help an old friend (30-40 years of friendship) secure a business loan. This old friend then disappeared with loan money. The guy who pledged his assets lost everything and committed suicide, leaving a wife and kids to grieve and without a roof over their heads.

My parents shared this story with me when I was young as a lesson to never trust anyone when it comes to money, and I've never forgotten it. If you can't trust an old friend, who can you trust?

This partly explains my paranoia about liability. I would like to think that my riding buddies won't sue me if I lend them my bikes and they crash, for example, but I just don't want to take that chance.

That is a sad story. I reminds me of a Robert Heinlein quote
Money is truthful. If a man speaks to you of his honor, make him pay cash.

 

[OldShooter]

For those concerned about low probability risks, Lifehacker has your back: https://lifehacker.com/8-zoo-animals-that-might-escape-one-day-and-how-to-pro-1849377974 (Protecting yourself from escaped zoo animals.)

 

[swakyaby]

FWIW, From my experience, the things you worry about and guard against seldom come to pass. It's the thing you can't imagine that broadsides you.

I would be interested in hearing of some of these unexpected liability true stories.

 

[Explore]

Another thing to keep in mind in regards to lawsuits is that many times it is the injured persons insurance company suing on behalf of the injured...subrogation. I've even heard of stories where the injured didn't even know that their insurance company filed a lawsuit on their behalf.

 

[marko]

I would be interested in hearing of some of these unexpected liability true stories.

My company was once sued because we sold a part that went on a part that was on a machine that someone got hurt from. Thing is, when the person was hurt, our part was still in transit and hadn't arrived. Still we had to pay thousands for lawyers etc

Another time we were summoned only to find that it was another company with a similar name as ours. We had nothing to do with it!

As my lawyer always tells me: " Anyone with 10 bucks can sue you. They don't need a good reason "

 

[athena53]

Frankly when I started the thread, I expected to hear horror stories about some folks being victims of personal liability lawsuits, but there hasn't been any of that.

A few years ago we hosted a party for the church youth group at our house which had a pool. The pastor's stubborn 5-year old ignored repeated orders NOT to dive off the side of the diving board and ended up with a nasty cut on the back of his head- not sure what part of the pool he scraped. He needed staples to close the cut.

I contacted the pastor and told him that if they had any out-of-pocket medical expenses, our Homeowners policy had a small amount of "Medical Payments" coverage - maybe $5,000, for incidents such as this, paid without regard to fault and with no lawyers involved. He said it wasn't necessary.

 

[Walt34]

As my lawyer always tells me: " Anyone with 10 bucks can sue you. They don't need a good reason "

At work a common expression was "You can sue someone for being ugly. Winning is another matter."

 

[ncbill]

Helps to live in the right place for those of us in the USA.

Here in my state a plaintiff can't collect monetary damages if they are even 1% at fault.

Private creditors can't garnish wages, only exception is for federally-backed student loans.

Nor can they attach any form of IRA, even inherited.

When a couple purchases real estate it is automatically titled as "tenancy by the entirety" so can't be attached by a creditor pursuing one of the owners.

Given the above I would think any plaintiff's attorney would be happy to settle for the combined auto/homeowner's plus umbrella policy limit.

 

[marko]

At work a common expression was "You can sue someone for being ugly. Winning is another matter."

True but it can cost a small fortune to defend yourself. You don't have to win in order to cause a great deal of pain to someone if that is your goal.

 

[Act2]

My Dad was a terrible driver the last few years he drove. He had an at-fault accident that destroyed his Suburban. Fortunately, the other driver was not injured. My Mom would not talk to him about putting down the keys and us ‘adult kids’ had to have tough conversations about it with him. My Mom had a ‘what’s the harm?’ attitude until I explained that, insurance or not, if his terrible driving killed someone, a lot of the assets she was counting on could go to pay the judgment. We got through that time, and both parents have passed now. But I’m also a believer in proper insurance and umbrellas. And I’m a believer in listening to family members who are trying to tell me I need to stop doing something that has become too risky now.

 

[RobbieB]

That's why an umbrella is important. You have a good lawyer on tap.

 

[Scuba]

We all like to think that we know people well enough to be able to trust them, but when it comes to money (or prospect of money from lawsuit), one never knows.

I may have shared this story on the board before. Short version: a family friend pledged his assets to help an old friend (30-40 years of friendship) secure a business loan. This old friend then disappeared with loan money. The guy who pledged his assets lost everything and committed suicide, leaving a wife and kids to grieve and without a roof over their heads.

My parents shared this story with me when I was young as a lesson to never trust anyone when it comes to money, and I've never forgotten it. If you can't trust an old friend, who can you trust?

This partly explains my paranoia about liability. I would like to think that my riding buddies won't sue me if I lend them my bikes and they crash, for example, but I just don't want to take that chance.

Only you can decide what chances are worth it to you. The story you shared is very sad.

 

[euro]

True but it can cost a small fortune to defend yourself. You don't have to win in order to cause a great deal of pain to someone if that is your goal.

Yes, of course, but if you carry any type of umbrella policy, the first million or several million is/are on the insurance company. It is true that everyone can be sued in this country but theses frivolous types of lawsuits we are talking about here are so unlikely to succeed that they will not be pushed far enough to cost that much. the opposing party (or their lawyers if they took the case pro bono) have serious expenses too.

 

[steveark]

Unbrella policies don't cover a lot of things

Umbrella insurance is generally an extension of your home and car liability insurance. If you are sued over some paid work you are doing then you definitely aren't covered by umbrella insurance. If you are sued over work you are doing at a nonprofit or for being on their board it may not protect you. Generally it pays for any liability you have except for things excluded so it is important to read the exclusions.

 

[Mark1]

I remember at Megacorp if something "bad" happened the managers all got their own personal attorneys (paid for by Megacorp). The individual contributors were represented by the same attorneys representing Megacorp (if even necessary).

Besides leaving on time, yet another reason not to go into management.

 

[JoeWras]

I loan power tools. I have a personal umbrella.

I serve on a non profit board. We have D&O insurance.

Gotta live life. I'd do nothing but sit on my ass and watch TV if I worried about everything. Then I'd die early from despair.

I don't loan my car. Funny story... I was volunteering with a disaster work team and got dropped off at the site. Someone was going to drive me back to the bunkhouse. At day's end, the guy with the vehicle declared he was too tired to drive. He threw the keys to me and said, you drive. I knew him for 15 minutes. So I end up driving this huge dualie work truck 40 miles. Let's just say neither of us had liability on our minds. We were more concerned with getting back to a shower, meal and cot.

 

[Fermion]

I do think people worry too much over stuff like this and then don't worry so much about things like cancer, which is WAAAAAY more likely to happen.

 

[JoeWras]

I do think people worry too much over stuff like this and then don't worry so much about things like cancer, which is WAAAAAY more likely to happen.

Or riding a bike for exercise. It's actually extremely risky and I do it a few times a week. Why? To feel alive.

 

[RobbieB]

Yes. I ride motorcycles.

Much to the dismay of my parents (when living) and my wife (still alive but worries too much)

Why? Because I like to ride motorcycles -

 

[JBTX]

This had some interesting info on typical liability payouts:

https://personalinjurysandiego.org/personal-injury/statistics-of-personal-injury-cases-nationwide/

It is worth noting that certain types of assets tend to have greater protection. 401ks are usually well protected from creditors (including lawsuits and bankruptcy). IRAs often are, but protection varies by state. TX is good, CA is weak. But to the extent the IRA is a rollover from a employer plan and that can be demonstrated that provides more protection. Homestead often has protections. While generally crappy investments annuities offer more asset protection.

I usually put auto and home liability near the maximum and add umbrella, and much of our assets are qualified assets. I wouldn’t stop doing things I’d like doing due to liability fears.

 

[Alan]

True but it can cost a small fortune to defend yourself. You don't have to win in order to cause a great deal of pain to someone if that is your goal.

In England if the judge decides that the lawsuit was without merit then the person who brought the lawsuit has to pay all the defendant's costs, which cuts down on a lot of frivolous lawsuits or lawsuits purely aimed at harming an individual.

 

[euro]

In England if the judge decides that the lawsuit was without merit then the person who brought the lawsuit has to pay all the defendant's costs, which cuts down on a lot of frivolous lawsuits or lawsuits purely aimed at harming an individual.

Yeah, the US judicial system is way out of whack in this regard. It’s good to ensure that the less wealthy have a way to get a day in court, but we have clearly taken it to the extreme. Common sense needs to prevail at some point - same with those insane damages that are sometimes awarded (see famous McDonalds spilled takeout Coffee case).

 

[SojoMojo]

I’m single, retired with normal assets (home, pension, IRA, etc.). Nevertheless, I’ve always carried a $1M PLUP. My friend who is also retired thinks a PLUP is a waste of money. The recent $300,000 personal injury civil case against Gwyneth Paltrow had us talking again about the necessity of a PLUP since my friend is an avid skier.

Given Paltrow’s celebrity status and wealth, I’m guessing she has at least a $10M PLUP. The accident happened in 2016 so there’s been years of legal defense expenses. If you’re the defendant (Paltrow) and you have a PLUP, all the legal defense expenses (attorney cost, expert witness cost, etc.) are paid by the PLUP insurance carrier. The $10M PLUP coverage limit is not reduced by these legal defense expenses. If her legal team spent $15M to defend her, she would still have limits of $10M in PLUP coverage to pay any judgment against her. (Paying the $300,000 demand would have probably been cheaper than the legal defense expenses and fees.)

Now that Paltrow has won her countersuit of $1, the plaintiff (Terry Sanderson) is now liable for all her legal costs and fees. That’s going to be a significant amount of money and Paltrow won’t be able to forgive or waive the award because the money belongs to the PLUP insurance carrier . . . and they will want all their money back from Mr. Sanderson.

When you have PLUP, the fear of getting financially ruined by a frivolous or a justified liability claim is greatly lessen. Of course, if you have NO assets, you can just give whoever is suing you the middle-finger.

 

[Music Lover]

Now that Paltrow has won her countersuit of $1, the plaintiff (Terry Sanderson) is now liable for all her legal costs and fees. That’s going to be a significant amount of money and Paltrow won’t be able to forgive or waive the award because the money belongs to the PLUP insurance carrier . . . and they will want all their money back from Mr. Sanderson.

IMO, when someone brings a frivolous lawsuit against a celebrity or someone rich, it's a mistake to countersue them for $1. Sue them for millions. They probably won't get millions if they win but at least it sends a message.