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How Much Liability Insurance is Enough?

Every day I am asked, “Do I have enough liability coverage?”  My reply, “I cannot answer that till we see the lawsuit. Liability is the great unknown. “

Let’s look at an event that took place this week, May 28 2013, in Rosedale MD.  A trash truck stopped on the railroad crossing as a CSX train is approaching and blowing its whistle. The vehicle does not move out of the way…. Result….Several train cars derail,  driver is pinned in the truck  that is destroyed by the train and then there is an explosion that causes the highway to be shut down, numerous homes and businesses to have damage, some of them receive minor damage while others have been condemned and are inhabitable, and a warehouse nearby had its facade blown off from the explosion.

Now let’s look at the liability exposures to the business owner who was driving a company vehicle to his business:

—Damage to the rail cars

— Damage to the railroad track for several hundred feet

— Damage to the product that where in the rail cars that are now damaged or destroyed

—Cost to remove the railroad cars and track

—Pollution cleanup expense to clean up the chemicals that seeped out and had to be removed to prevent environmental hazard

—Warehouse cost to store the railroad cars and track while they are being inspected by NTSB

— Loss of income to the businesses in the area that had to close or could not get customers because of the emergency crews shut down roads

—Damage to the several homes in the area for both damage to windows and glass and the hundreds of thousands of dollars in structural damage done to several buildings in the area

— Loss of use by CSX from not being able to use those tracks to move products to and from

— Cost for the NTSB investigators to investigate the cause of the derailment

— Possible liability claims from the people in the area that allege that they were sick by the chemicals and fumes that escaped during the explosion that they breathed in. 

— Injuries to people who were near the explosion site

When we talk about a $1,000,000 liability it sounds like a lot, until we look at events like this.  And we can easily calculate that $1,000,000 would not be enough to even begin to pay for a loss like this.  Would $2,000,000, $5,000,000 or $10,000,000 be enough? That is the great unknown.

When it comes to liability coverage you can never have too much coverage because you are not just gambling what your business has today, but also its future earning potential.

Contact Huff Insurance today and increase your umbrella by an additional $1,000,000 or more.  And if you don’t have an umbrella purchase one today! Every Business Needs One!  You can reach us at 410-647-1111.

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