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Thursday, January 29, 2009

Insurance styles of the rich and famous - protecting their assets

Personal insurance is up and liability sales are booming

InvestmentNews

By Darla Mercado December 7, 2008, 6:01 AM EST

... Carriers that provide personal line coverage for jewelry, yachts and mansions say that business is still good, even though signs point to an upper class that's less than sanguine about the economy.

For instance, the Chubb Group of Cos. wrote some $995 million in personal insurance during the third quarter, a 2% gain from the year-ago period. That unit of the Warren, N.J.-based insurer covers yachts, jewelry and personal liability, said Jim Fiske, vice president of Chubb.

In addition, interest in personal liability coverage — insurance to cover affluent individuals in the event of a lawsuit — has increased in the last few years, he added. ...

Anecdotally, some insurance executives say that people are more likely to sue for personal liability in a down economy, though the suits aren't numerous enough to be statistically significant.

For instance, the most affluent clients may have household staff or a business, and they could face pressure to lower expenses and cut employees when the economy gets tough. However, those clients could be facing a liability claim if a former worker comes back with a suit against the employer, Mr. Fiske said. ...

"I think we're dealing with a savvy insurance customer, individuals with assets that need to be properly insured," said Derek Ross, vice president of CM Meiers Co., a Woodland Hills, Calif., insurance brokerage. "We may not see an increase in people adding additional vehicles, but we will continue to see increases in liability coverage." ...

Types of requested coverage have varied from excess liability insurance for an 800-person Republican shindig to protecting a mansion and the art collection within from wildfires, according to Charles E. Williamson, president of AIG Private Client Group, a high-end property/ casualty subsidiary of New York-based American International Group Inc. ...

"As the years go by, personal liability umbrella coverage is most often overlooked and not taken care of," said Scott Ford, president of Cornerstone Wealth Management Group in Hagerstown, Md., which manages $150 million. ...

"You can be doing the right things with your investments and have your long term care and estate planning taken care of," he said. "But if you're sued, you may not have enough protection to cover yourself."

E-mail Darla Mercado at dmercado@investmentnews.com.