Personal Liability Concerns/Fears Over Everyday Activities

[skyking1]

I am helping a friend move back to NY, and when the thought of me having to stay and work or be with family, she brought up the idea of someone else driving my truck, towing her car across the country. LOL no, literally LOL. If I can't make the trip for some reason I will simply assist financially in the alternative. KISS.

 

[Midpack]

I don't loan out cars, and I won't drive someone else's personal vehicle either even though some have offered over the years. Last thing I want between a friend and myself is an accident with their car even if I was 100% NOT at fault - not worth the potential hard feelings or repair hassles.

 

[Sojourner]

OJ Simpson played golf in Florida after millions in civil awards from civil lawsuit. How? Because it was in his trust and the trust paid the bills, not him personally, so technically he didn't own the assets and civil cases are against people's assets, not their trust funds.

IANAL, and I certainly don't claim expertise in this area, but I don't think this is quite accurate. IIRC, OJ's wealth was shielded from the civil lawsuits primarily due to Florida's laws regarding real estate and retirement accounts. I think Florida law protects things like your primary residence, your 401(k), and maybe even your IRAs from legal liability judgments. I can't imagine that anyone with substantial assets (like many of us here) could ever be sued successfully if simply setting up a trust were such a bulletproof way of shielding one's assets from liability claims.

 

[Closet_Gamer]

We rely on our umbrella but we need to expand it. We did the umbrella several years ago and its too small now.

Beyond that, I just try to ensure we're behaving sensibly.

 

[GenXguy]

Most people don't seem to worry about it. They do work on their homes without permits, that they may end up selling someday or are even planning to sell in the near term.

 

[Aerides]

I don't worry much about it, but I do make sure that anyone I hire is licensed/insured, for any work on my property. I would never hire a cheaper handyman type without them, and probably pay more as a result. Oh well.

We recently had some duct work done, and before we got the quotes (which meant lots of people going up in the attic) I upgraded and replaced our old rickety wooden attic ladder - it had issues and needed replacing anyway.

But, yeah I'd still let a friend ride my bike. Not my car though.

 

[6miths]

It is nice to live in a place with less lawyers and a more relaxed attitude. I guess another plus of having universal health care.

 

[skyking1]

+++ to that above!
What are you folks paying for an umbrella, if you don't mind?

 

[athena53]

+++ to that above!
What are you folks paying for an umbrella, if you don't mind?

There are other threads on this but I'm paying a $443 annual premium for $3 million in MO, which requires underlying Auto limits of $500K/$500K.

Good point raised on workers n your home. I prefer to go with established, incorporated businesses for that reason.

 

[youbet]

I don’t worry about it and we have umbrella insurance for that reason, but I can see both sides. I’m sure we hear about nuisance suits WAY disproportionately, because readers like to talk about it…

It's not just "hearing about" nuisance law suites......... We are being inundated by law firm advertising here. The industry seems to have lost its mind. Billboards along I65 near Valparaiso, Indiana seeking potential clients for liability claims and/or suites shade the landscape. One of my favorites extols the virtues of an attorney who labels himself "The Hammer." He guarantees he'll "getcha" money or no fee to you......... He'll "hammer" that insurance company and get you the justice you deserve!

I just listened to a radio commercial where the law firm representative was explaining that the person you're suing will pay nothing themselves. Her insurance company will pay everything, including legal fees. So, don't feel bad for the person you're suing or the over-sized amount you may collect cuz it'll come from that evil insurance company!

Late night TV is a stage for these ads too.

I try not to worry about the situation, carry several million of umbrella coverage and do my best to not do too many stupid things, but when you're bombarded 24 hours a day with attorneys pleading to the public to contact them with your stories so they can get you a bundle with no effort on your part, it's hard to not imagine yourself being a victim.

 

[OldShooter]

I think the frequency of personal liability lawsuts of the sort the OP is worried about is negligibly small. Sure, we have an umbrella and car liability insurance but beyond that I don't worry at all. This includes 15 year stints racing sports cars and flying light airplanes. In both cases the organizations had insurance but I never worried much about liability. Again, as far as I could tell the frequency of lawsuits was zero.

Psychologists tell us that humans are very bad at statistics. It is just a skill that wasn't important to evolutionary success. To this point, we tend to worry about thing very disproportionately to their likelihood. Case in point, tornado deaths. They are very infrequent, averaging about 40 per year nationwide. Yet people run for shelters even for simple tornado watch conditions. Similarly, people buy "accidental death" insurance even though, for us older folks, accidents are well under 10% of deaths. Same story with flight insurance as they used to sell at airport kiosks; underwriting losses were approximately zero. Deaths from a borrowed power tool -- I'll go out on limb and guess them at zero with the number of lawsuits related to such deaths an even smaller number.

No, not me. I got the umbrella for that. Not going to worry about it. And certainly not let it run my life.

I'm with @RobbieB.

There is no elimination of risk, but certainly it is reasonably to take simple steps to reduce it.

Not if the risk is so vanishingly small as to be nonexistent and the cost to mitigate is not zero.

 

[Walt34]

Some people worry too much I think. Not only have I loaned friends my chain saw, I loaned a couple of (very close, and qualified) friends my motorcycle. One guy I even loaned my airplane.

Nothing happened. And all that was even before I bought umbrella insurance.

 

[swakyaby]

Several years ago, DH was having fun riding up and down our street on an electric scooter. Several kids on the block saw him and asked him if they could ride it around. He told me he almost said yes. (They were about 8-10 years of age). I said that it was nuts for him to even consider that, without their parent’s expressed permission. He thought I was being paranoid.

 

[braumeister]

Some people worry too much I think. Not only have I loaned friends my chain saw, I loaned a couple of (very close, and qualified) friends my motorcycle. One guy I even loaned my airplane.

Nothing happened. And all that was even before I bought umbrella insurance.

When I was in my 20s, it was very common to borrow a friend's car now and then.

 

[REWahoo]

When I was in my 20s, it was very common to borrow a friend's car now and then.

+1

When I was in college I borrowed a friend's '58 Corvette to take my now DW on our first date.

 

[marko]

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.

 

[youbet]

I think the frequency of personal liability lawsuts of the sort the OP is worried about is negligibly small. .

Yet the amount of advertising going on by law firms seeking liability law suite clients is widespread across the media. Maybe attorneys just don't get business and economics. If you're spending a lot of money advertising and not getting a reasonable payback, maybe those advertising dollars are not being well spent.

And like most others here, I have a pretty hefty umbrella policy despite not being "worried" about needing it.

I guess all the talk about our society having become very litigious is coming from folks with their heads up their butts.........

To OP:

Do any FI/RE folks share similar concerns/fears?

I do. Enough so that I spend upwards of a kilobuck annually for an umbrella policy and counsel my son to carry plenty of liability insurance too. With his kids now all at driving age, I sleep better with that coverage in place. Note, I don't fret about it. But I do think the risk is significant enough to warrant putting protection in place.

 

[gauss]

^^ I think the target of most of those law firms that advertise is third-party payers such as insurance companies -- not individuals.

-gauss

 

[youbet]

^^^^^

Might we then be increasing the possibility of being sued by carrying hefty umbrella policies?

 

[OldShooter]

... Might we then be increasing the possibility of being sued by carrying hefty umbrella policies?

Well the shysters can't know ahead of time about umbrellas, but in our state (probably in all) their first step in court is to legally demand a "wallet check" to determine the insurance limits.

I was told by an aviation insurance underwriting manager that in his career he had never seen a jury go beyond the defendant's insurance limits. He said they seem to feel it's OK to stick it to the insurance company but not to the individual. We were talking about his company's limit of $1M and whether that was enough for me.

 

[Scuba]

You're right that there are lots of daily activities where risks are unavoidable, things like driving, contractors, family gatherings, etc. I don't worry about them because they are part of everyday life, and as long as I do my due diligence (e.g. having car insurance, making sure contractors are bonded, etc.), I am fine living with these risks.

My concerns are with "discretionary" things where I have more control over managing/eliminating unnecessary risks. These risks can be easily eliminated without impact to my quality of life. So for example, lending bikes or power tools, refereeing a sparring session, etc, are "things" I can easily do without.

Thankfully I don't sit around worry about these thing too much (although I did a lot of risk management during my corporate career so I have a fairly active imagination) , but I figure if there are specific actions I can take to eliminate these risks without impact to my quality of life, I'll happily do them.

If I’m close enough to someone that I would allow them to borrow my bike, power tools, etc., I’m willing to go out on a limb and assume they wouldn’t sue me if something bad happened. I wouldn’t loan valuable items to someone I didn’t know well.

 

[Scuba]

I do agree with other posts about not loaning out to or borrowing a car from a friend. Too much potential for problems, and with all of the other options (rent a car, take an Uber, ask a friend for a ride, etc.), I can’t think of a good reason to let a friend borrow a car or ask them if I can borrow theirs.

 

[luckydude]

If I’m close enough to someone that I would allow them to borrow my bike, power tools, etc., I’m willing to go out on a limb and assume they wouldn’t sue me if something bad happened.

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.

 

[luckydude]

OP here. Thanks to all for replying. Appreciate your inputs.

From what I gather, the consensus is that I may be just a tad bit paranoid , but it is still a good idea to exercise some level of caution.

Thankfully I do have a large umbrella policy already in place. I need to explore other forms of asset protection as part of my on-going estate planning, as a couple of forum members have recommended.

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. Despite the relatively small sample size of this audience, it's reassuring to know that no one on this board at least has had the misfortune of being on the wrong side of such liability lawsuits, and therefore such lawsuits may not be as common as I fear.

Thanks again to all!

 

[luckydude]

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.

This is so true!