What’s at risk when your work life and your personal life intersect?
“Technology makes it easier than ever to take work home with you, but the related insurance protection won’t necessarily follow you there.”
Recently, I met the CEO of a privately held technology firm who, in the course of our conversation, mentioned having hosted a clambake for employees at his summer estate.
As an insurance professional, I immediately heard alarm bells going off in my head. When I asked how much personal liability coverage he had in the event that something went wrong, his reply validated my concern: “Oh, the company has a policy for that.”
The financial line between business and pleasure is often blurred, and the stakes rise ever higher as you grow more successful. Understanding—and addressing—the related risk, therefore, is no easy task. Your friends’ and neighbors’ insurance policies may respond differently than yours do, and the commercial coverage at your place of business may have unexpected exclusions or limitations when you’re out of the office.
RECOGNIZE THE RED FLAGS
Even the savviest professionals may unwittingly overlook scenarios that compromise their hard-earned wealth. Following are common situations that can expose you to added risk:
• Business conducted at home: A slippery walkway, an over-served party guest, a broken pool gate . . . these are just some of the many factors that can lead to accidents. Normally, a homeowners policy would respond first in the event of a liability claim, yet many insurance providers have exclusions for activities deemed to be business pursuits. In some instances, the difference is obvious, such as a homeowner selling wine made from vineyards on the property. However, merely hosting a meeting or special event at your residence could also negate your coverage. In addition to liability concerns, you may have to contend with general property damage or theft while visitors are on the premises.
• Travel: Larger companies typically have formal policies in place regarding business travel, but what sort of parameters are in place if your family joins you? If a medical emergency cuts your plans short, who will bear the financial burden? If you’re in a location with a heightened risk of political unrest or crime, what sorts of resources will be extended to your family members during an emergency?
• Cybersecurity: In the world of all things internet, our lives and exposures will continue to evolve. Technology makes it easier than ever to take work home with you, but the related insurance protection won’t necessarily follow you there. We also have smart homes, where we can access many functions via mobile devices. Just as you would in the office, identify any vulnerable points of access at your residence and follow expert advice to safeguard against intrusion.
• Valuables and collections: Most of us bring personal effects from home to decorate our offices. Sometimes, those effects include fine art, prized memorabilia or other valuables. Do you know how your insurance would respond if a pipe burst behind the wall, or you came in one morning to find something missing? Fragile or one-of-a-kind items may require highly specialized restoration services to regain or preserve value, and not all policies provide that level of care.
ATTACK THE AMBIGUITY
Property and liability insurance is a critical component of a solid personal wealth-management plan. The best way to avoid unexpected threats to your net worth is to consult a reputable independent insurance advisor who specializes in serving high net worth clientele. In addition to reviewing your personal insurance portfolio on a regular basis, this individual can help you identify potential coverage gaps stemming from your professional life.