Most responsible persons would agree that life insurance is very important. But they still do not wish to discuss it in depth.
Would a producer get a different reaction to, “What percent of your major assets are vulnerable to involuntary redistribution by a court?”
Many persons do not realize that they may be held legally responsible for damages sought by a claimant they never met or had any direct involvement with. When a producer is able to garner the prospect’s asset insulation, related subject areas such as estate planning, business succession, life insurance funding and other vital planning areas are more easily explored on an advisory rather than vendor basis.
Who tends to get sued?
Closely held businesses are especially vulnerable to litigation risk since most do not have internal human resource, legal or risk management departments. The owner and managers generally wear many hats and tend to react to issues as they occur rather than plan proactive prevention.
Perhaps the most insidious risks are from employment practices brought by one’s own employees. The cost of defense against harassment, wrongful discharge or discrimination can exceed $100,000 — even if you win. Many other serious risks are not insurable at all including divorce, disputes, wage related employment practices, environmental issues and punitive damages.
Risks that are insurable have policy internal limits and exclusions.
The use of strategic planning incorporates legal entities used to segregate major assets and keep litigants and creditors at bay by removing the financial gain incentive that drives most litigation.
When you consider how often we buy, sell, rent, employ, borrow and disagree with others, it is difficult to imagine not ever being named in a significant litigation claim. (Photo: iStock)
Common sense dictates that a society’s legal system should discourage wrongdoing by imposing punishment and reparations on those so deserving. Our legal system has been manipulated and reconfigured to the point that only those that can pay are sued so as to produce financial rewards for claimants and their lawyers.
Affluent people are more likely to be linked by creative lawyers to being legally responsible for damages even if the correlation is quite indirect. If you sue enough affluent defendants, you will likely get a settlement or judgment in your favor eventually.