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Guarding Against Unexpected Dangers

street_signIn the blink of an eye, you could lose what you’ve spent a lifetime acquiring. Creditor judgments, accidents, or natural disasters are very real threats to your home, your business, and your financial assets. Fortunately, there are ways you can protect what’s yours. Here’s what you need to know.


Carrying the maximum liability coverage available on your homeowners and automobile insurance policies is a good start. However, that coverage may not be sufficient. Consider purchasing excess liability insurance. Often called umbrella insurance, excess liability insurance provides additional protection should the amount of a claim exceed the limit on the underlying home or auto policy.


Review your business owners policy regularly to make sure there are no coverage gaps. A standard policy will combine property, commercial liability, and business interruption insurance all in one. Or you can choose to have separate policies. A business owners policy does not include workers’ compensation or coverage for vehicles. Doctors, engineers, and other practicing professionals also need adequate professional liability insurance to protect against malpractice claims.

For business and real estate ventures, using an entity that offers some form of limited liability can reduce your personal exposure to the claims of business creditors. You might consider structuring your business as a corporation, limited liability company (LLC), or limited partnership.


Know that your 401(k) or other qualified retirement plan assets are protected from general creditors under ERISA (the federal pension law). The protections afforded the assets in individual retirement accounts (IRAs) are a function of federal bankruptcy laws and applicable state laws. Your attorney can explain how far these protections extend.

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