No one wants to deal with the hassle of getting sued, but unfortunately, it happens. So, it's critical to protect your money from risks, such as you, a family member, or an employee getting found at fault in a lawsuit and having to pay expensive damages.
This post will cover seven ways to reduce various risks, so you can protect your money from potential lawsuits and losses.
1. Purchasing liability insurance
Buying liability insurance is one of the most important things you can do to protect your assets. It can be combined with other insurance or purchased as a stand-alone policy. If someone sues you, liability insurance covers your legal costs, up to your policy limits.
For instance, if you have $250,000 of liability coverage and get found at fault for $750,000 in legal damages, you'd be responsible for paying the difference, or $500,000, out of pocket. Having enough liability is critical for protecting your future financial health. Getting involved in a personal or business lawsuit is a significant financial risk you could face.
Here are several common types of liability you may need.
If the court awarded $50,000 for medical bills, but you only had $10,000 of coverage, you'd be responsible for the remaining $40,000.
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Auto liability insurance is required in almost every state if you own a vehicle; however, each state's minimum varies significantly. So, if your state has a low liability coverage requirement, you likely need much more. In Florida, my home state, drivers must only carry $10,000 of personal injury liability and $10,000 of property damage liability. That's a small amount of protection if you ever got into an accident and hurt someone or their property.
For instance, if your teen driver got into a car crash and injured a passenger or another driver, you'd likely get sued by the injured party or their insurer. If the court awarded $50,000 for medical bills, but you only had $10,000 of coverage, you'd be responsible for the remaining $40,000...
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