Make sure you have enough coverage. Personal liability risk is inherent in the ownership or rental of real estate, automobiles, recreational vehicles, and other real and personal property. Certain professional, business, and volunteer activities also result in liability risks. Most individuals purchase casualty and liability insurance for their home and automobiles.
State law governs minimum requirements for auto insurance.
Banks that hold mortgages on the property generally require home insurance. In most cases, these policies should be supplemented with umbrella liability coverage. It is important to understand what items are covered, and what items are excluded, under the policy. Proper risk management and planning will help in avoiding events that might lead to personal liability. Knowing the items covered by a liability policy will help identify areas of potential liability to avoid.