Wealthy people have a lot of opportunities for enjoying the holidays, but they need to be careful while being merry, an insurance consultant said.
Something as simple as serving a holiday guest one last drink for the road can be costly, especially for high-net-worth people who have deep pockets to raid.
Although laws vary by state, the host is usually responsible for damages caused by guests who leave the premises drunk and then get in an accident, warned Bob Courtemanche, national private client practice leader for Risk Strategies Company, an insurance brokerage based in Boston.
The repercussions of over-serving guests who have already had enough to drink can hit high-net-worth people harder, since they have more resources for those seeking out damages in a lawsuit, Courtemanche said.
Meanwhile, wealthy people who hire others to throw their holiday parties and clean up the confetti afterwards may need workers’ compensation insurance.
The wealthy also travel to more exotic destinations to celebrate the holidays and to get out of the cold, and some of those destinations are dangerous.
“Wealthy people need to think about kidnapping insurance,” which can provide security personnel to keep family members safe and even negotiators and ransom payments, if necessary, he said. Many corporations provide security and buy insurance for their executives to protect them from potential harm in foreign countries.
Everyone does more shopping during the gift giving season and packages left on the porch of a mansion may be even more inviting than those left on a city stoop, and the home is probably more isolated than a middle-class neighborhood. Extra precautions for surveillance and for bringing in packages immediately upon delivery need to be taken, he said.
“Protecting assets can be something as simple as not putting jewelry or expensive gifts in luggage that is to be checked, because it is likely not going to be there when you unpack,” Courtemanche warned. “Carry it on the plane, so it is never out of your sight.”
Social media has opened up a whole new arena for potential lawsuits, including personal liability suits for damages to reputation or loss of business because of things written online, the insurance executive added. Personal liability insurance can be purchased in increments. A $5 million policy might cost about $2,000 a year, so it is relatively economical compared with the risk that is being avoided, Courtemanche said.
Over his years in the insurance industry, Courtemanche said he has seen wealthy people underinsured for routine risks, as well as for potential catastrophes.-
