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IPS / Lighthouse Insurance Group Blog: personal liability

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Jet SkisIt’s that time of year when many people take trips to the lake and rent Jet Skis or Wave Runners for some fun but you have to be careful! Many rental agencies will advise that coverage is afforded by a homeowner policy but that is only partially correct. A standard homeowner policy will provide liability coverage when someone rents a personal watercraft as long as it has less than 50 horse power. It is rare to find any personal watercraft with horse power that low. We highly recommend checking with the rental agency to see if they offer coverage that can be added to the rental agreement.  

Image courtesy of arztsamui /

VolunteersMillions of Americans donate time—their most valuable asset—to serve as a volunteer board member on non-profits, booster clubs, churches, PTAs and civic organizations, just to name a few. The decisions these folks make can have a dramatic impact on their respective organization—and not always for the better. If a volunteer endeavor goes bad, would a volunteer board member have coverage against a lawsuit under his or her homeowner’s policy?

Homeowners’ Insurance
The last thing volunteers want to consider is what would happen if their favored organization file suit against them as a result of their efforts. But it happens, and not infrequently. This does happen, especially when volunteers make decisions that directly influence the finances of an organization. Often, the only insurance these volunteers have to back their efforts is a homeowner’s policy. Unfortunately, this policy may be of little assistance.

The reason homeowners’ policies do not usually cover liability stemming from actions as a volunteer is the nature of the claim. The policy is designed to cover claims of “bodily injury,” such as someone slipping on cracked pavement in your driveway; and/or “property damage,” such as accidentally setting your neighbor’s house ablaze when burning some brush on a windy day.

Claims against board members do not usually involve bodily injury or property damage. Rather, they involve bad decision making that results in financial loss to the organization, such as the decision to invest in an IT system that turns out to be a debacle, costing the organization tremendous time and money.

There is another problem. Homeowners policies do not cover “professional services.” This is important to note, because board members are often asked to serve in a capacity consistent with their profession. For example, a church member who is a CPA may be asked to serve on the church’s board as finance chairman. Even though he is not paid for his services, the “professional services” exclusion under his homeowner’s policy would still apply.

In addition to the above, homeowners policies do not cover claims of personal injury unless this coverage is specifically added. Personal injury insurance is added to the homeowner’s policy to cover claims such as libel, slander, wrongful eviction, and false advertising.

What to Do
Events causing claims are unpredictable. While the reasons shown above prove it’s unlikely, not all claims against volunteer board members are excluded by a homeowners policy. Decisions to purchase personal injury coverage and a personal umbrella policy will increase your ability to find coverage for a suit against you. 

The best method for insuring the actions of board members is for the organization to purchase a directors and officers (D&O) liability policy. These policies are relatively inexpensive for most non-profits. Before volunteering, request information on the organization’s D&O policy. The absence of this insurance leaves you at risk of having no personal insurance to defend a suit brought against you by the organization and should influence your decision to serve.   

Insurance Planning Service is an independent insurance agency offering a full range of insurance products – auto – home – business – life – health – to individuals, families and businesses throughout Michigan.  Call or visit us on the web today for a quote on Michigan Umbrella Liability for your family or Directors’ and Officers’ Liability for your organization or business!


The amount of renter’s insurance that you should purchase depends on your personal situation, net worth, and tolerance for risk. A basic policy gives you coverage in these areas:
  • ~ contents on and off premises
  • ~ additional living expenses
  • ~ personal liability
  • ~ medical payments
  • ~ property of others
The amount of maximum coverage you personally purchase could be anywhere from $10,000 to however much you determine is the value of your personal property. It could also be more if your net worth is high and you prefer to carry additional liability insurance, although higher liability may be covered under a separate umbrella liability policy. Be sure to discuss this with your agent.

To help you determine how much renters insurance you should purchase, you should add up the value of your personal property based on what it would cost you to replace it all if there is a total loss. Take an hour or so and make a comprehensive list of everything you own in the property. You can even search for a home inventory list on the Internet, as there are plenty of them available for free.

Your list would include items such as:

  • Clothing and Soft Goods – suits, shirts, slacks, ties, shoes, jeans, athletic clothing, towels, linens, comforters, carpets, rugs, and everything else you have and can document
  • Electronics – computers, video games, stereos, clocks, DVD players, iPods, Kindle, iPad, cell phone, TVs, and all the add-on devices like backup storage, software, game controllers, coffee makers, toaster ovens, microwave ovens, washer/dryer, refrigerator, air filters, etc.
  • Furniture and Kitchen Items – couches, chairs, beds, dressers, artwork, plants, patio items, desks, lamps, and any other furniture, silverware, pots and pans, baking and cooking equipment,
  • BBQ grills Other – bicycles, athletic equipment, jewelry, coins, collectibles, books, wall shelves, lamps, ironing board, luggage
  • Another other items you own

By taking the time to list and categorize your belongings, you will be able to better ascertain the values and properly insure your belongings.

The next task is to take the list you have prepared and assign values to each item on the list. You should assign a value that would cover the cost to replace that item with a new one. You can use the Internet, or go to stores to help you determine the monetary value of your items if you are unsure about what they are worth.

You will likely be surprised at the total value of your belongings when you start adding up everything to determine the maximum amount that you need to have insured. It's a good idea to over-insure a little too, because you will likely have forgotten some things on your list, and that extra coverage will help you purchase those items you need to continue should you suffer a total loss. After all, a little extra insurance typically only raises your premiums a little, while making certain that you will be able to maintain your current standard of living even if disaster strikes.

With the list of your items and total value, you can discuss the amount of coverage you need with your agent. Your agent will take your requested amount and prepare a policy and premium quote for you. Once your pay the premium, you are covered for losses up to the maximum policy amount for the length of your insurance term. Typically, this is one year. 

Make sure you save the list of your personal property in a separate location because you do not want to lose the list if there is a loss at your house. It's a good idea to email the list to yourself too so that it can be stored and accessed on any computer with Internet access. As an extra precaution, you could also take digital photos and/or videotape your belongings. This is especially important with more valuable items so that you can prove to an insurance adjuster that you owned the items and validate the quality of them.

Remember too that the policy will cover you for liability. If you have significant financial net worth, or special valuables like artwork, you need to discuss those with your insurance professional to see what the appropriate amount of insurance coverage would be for you.

By taking the time to properly document and assign values to your personal assets, you can be sure to obtain the proper insurance coverage.

To answer more of your Renter's Insurance questions, contact Insurance Planning Service at 800-220-5582 or use our online contact form today!


Today, families are feeling the pressure of caring for young children and aging parents.  As a result, many are turning to others for help in their home.  If you hire household help, make sure to get the appropriate insurance coverage.Baby Sitter


Even if you only occasionally hire a baby sitter or a young person in the neighborhood to rake leaves, you can be liable for injuries they sustain while working for you.

  • Talk to your insurance professional to find out how much personal liability coverage is included with your homeowner’s or renter’s policy to determine if it is adequate.  In general, policies start with $100,000 of coverage
  • Consider increasing the amount of personal liability coverage in your policy.  A substantial increase can cost less than $20 per year.  Or, you may want to consider an umbrella liability policy.  This would provide broader coverage and a minimum of $1,000,000 of additional personal liability insurance.
  • Look at the amount of medical coverage included in your policy.  Medical coverage on a homeowner policy will cover medical bills stemming from injury to someone other than a resident of the home that occurs on your property.  The coverage amount often starts at $1,000, but it can be increased for a small additional premium.


If you hire someone to work at your home on an ongoing or regularly-scheduled basis, you should consider purchasing workers compensation insurance.  Workers compensation insurance will provide coverage for medical care and physical rehabilitation for an employee who is injured on the job, and for lost wages if he or she is unable to work because of that injury.Nanny

Michigan’s workers compensation insurance program has specific classifications for domestic workers including categories for “inside workers” (such as maids, butlers, nannies, aids, cooks, nurses, interior maintenance, etc.) and for “outside workers” (such as gardners, lawn care workers, exterior maintenance, etc.).  Each of these categories have one rate for full-time and another for occasional (part-time) which is less than 20 hours per week.


Don’t forget about auto insurance!  If the person working for you will drive your car, make sure that your insurance company knows about the additional driver.  If the person will be using his or her own car, obtain proof that they have proper and adequate insurance in effect.


If you contract with an outside firm to provide services at your home, always obtain a Certificate of Insurance before allowing their employees to work for you.  This includes any type of company that you hire to work in or around your home - including nannies, health care, lawn services, snow removal, tree trimmers, and home improvement. The certificate should come directly from the firm’s insurance agent or company and should have your name and address filled in as the certificate holder.  Be certain that it indicates that the firm carries commercial general liability, professional liability (if the firm is providing professional services), workers compensation and commercial auto liability insurance that includes owned, non-owned and hired vehicles.

We at Insurance Planning Service can help you determine what coverage can best protect you.  Call us today at 800-220-5582 or contact us via the web!

When looking for homeowner's insurance, you should be aware of the six primary coverages included in the policy:
  1. DWELLING.  Dwelling coverage is the coverage that applies to the home itself; the building.  It pays for the repair or replacement of your home in the event damage occurs from a covered cause of loss.  It is important to know that there are several forms of standard home insurance.  Some are referred to as "Named Peril" forms and others are "Open Perils".  The differences are huge.  A "Named Peril" policy will list the various causes of loss that the policy covers such as fire, lightning, wind, hail, etc.  If the cause of loss isn't listed, it isn't covered.  In contrast, an "Open Perils" coverage form is much broader.  In essence, it states that any form of direct physical loss is covered with the exception of what is specifically excluded.  Flood and earthquake are always excluded from the standard homeowner insurance policy.  Flood insurance must always be purchased on a separate policy; earthquake can often be added to the homeowner policy for an additional premium.  The homeowner policy values a loss based on the cost to repair or replace. Therefore, the dwelling limit on a homeowner policy must reflect the home's replacement cost - not market value.  Homeowner policies contain a built-in penalty in the event a home is underinsured at the time of loss!
  2. OTHER STRUCTURES.  This part of the policy pays for damage to a detached structure that sits on your home premises, such as a garage, shed, pole barn, etc.  The coverage form that applies to the dwelling also applies to other structures.
  3. PERSONAL PROPERTY.  Sometimes referred to as contents coverage, this is the part of the policy that pays for personal items, or your "stuff".  The amount of coverage included is typically 50% or 70% of the dwelling amount, but it can be increased if this automatic amount is not sufficient.  Contents coverage is "Named Peril" on the standard policy, but it can most often be changed to "Open Perils" for an additional premium.  The standard policy also values home contents on an Actual Cash Value basis but can be changed to pay replacement cost.
  4. LOSS OF USE.  Not only will a standard homeowner's policy pay to rebuild your home and other structures, and pay for its contents if damaged by a covered cause of loss, it will pay for you to temporarily stay somewhere else while repairs are being made if the damaged home can not be lived in.
  5. PERSONAL LIABILITY.  The homeowner's insurance package includes liability insurance to protect you in the event you or a resident family member (or a pet!) cause injury or damage to another person.  Standard coverage amounts typically start at $100,000 but most insurance companies are able to increase the coverage to $1,000,000 for as little as $30-$40 per year.  This coverage includes the cost of hiring legal counsel to defend you! 
  6. MEDICAL PAYMENTS.  Medical payments will pay if a visitor is injured on your home premises.  Your policy will pay even if you were not negligent in causing the person's injury.  Often, paying for an injury can help to fend off a potential law suit.

When shopping for homeowner's insurance, it is also important to realize that while these six coverage areas are fairly consistent from one insurance company to the next, there are often differences that lurk behind the scenes - buried in the "fine print".  These can include differences in the way policies will respond to business property, or limitations on theft of jewelry or other collectible items.

The professionals at Insurance Planning Service can help you determine how your policy functions in these various areas.  Call us at 800-220-5582 or contact us via the web.

By Richard D. Bernard, AAI, CIC

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Lighthouse Group Main Office in Grand Rapids, MI
Mailing Address | P.O. Box 530009, Livonia, MI 48153

Phone: 734.421.9900 | Toll Free: 800.220.5582 | Fax: 734.421.9911

Also serving these Detroit area communities in Michigan: Livonia, Farmington Hills, Ann Arbor, Southfield, Plymouth, Canton, Westland, Northville, Novi, Dearborn, South Lyon & Walled Lake