Issue No. 19 Client Brief April 2008
Did You Know about Umbrella Liability Insurance?
Better to be safe!

how umbrella insurance worksBarton Sacks, President of the Sidney Sacks Agency says that car owners and homeowners should consider obtaining umbrella liability insurance.

Imagine you are in a car accident with a neurosurgeon – or the neurosurgeon slips and falls at your house – and the surgeon loses the ability to work. Liability exposure could be tremendous, in the many, many million of dollars. If your insurance policy doesn't cover the full amount, you are personally on the hook for the excess liability and your property can be seized in payment.

To protect against that kind of unlikely liability, Sacks advises those who can obtain umbrella liability to do so. The umbrella has a high deductible – typically $300,000 – which would be covered by your regular insurance premium. The umbrella insurance kicks in to cover amounts in excess of your regular insurance limits. You are usually required to have at least a $300,000 limit on your auto and/or homeowner's insurance in order to qualify for umbrella coverage.

Umbrella insurance is cheap compared to your basic insurance and is well worth the additional cost. It typically costs $250.00 for the first $1,000,000.00 and $100.00 for each $1,000,000.00 above that. In some cases, the umbrella liability can cover an individual who is on the board of a nonprofit organization for director’s and officer’s liability. It also often includes worldwide coverage for an automobile accident.

Workers' Compensation for Corporate Officers
Should you waive coverage?

man on crutches
Many businesses elect to save money on workers’ compensation premiums by having officers opt out of coverage. Under Pennsylvania law, while corporate are generally considered employees of the company and must be covered by its workers’ compensation plan, “executive officers,” officers who own 5% or more of a corporation - or any portion of a Subchapter S corporation - may waive their rights to coverage. These waivers reduce the number of employees covered by the insurance plan and, thus, also reduce the premiums paid by the corporation.

If you are an officer considering whether to waive coverage, consider your position carefully before you decide to opt out of the insurance plan. If you do opt out, you lose all medical, wage, and death benefits otherwise legally available for work-related injuries. And the choice will affect not only your situation but the situation of your survivors. In a recent case, a Pennsylvania widow sought death benefits after her husband, a corporate officer, died from a heart attack as the result of an accidental electrocution at work. The corporate employer and its insurance company produced a waiver signed by the husband and denied the widow’s benefit claims based. The widow challenged the authenticity of the signature, but handwriting experts supported the company, and the denial of benefits was upheld both at the administrative hearing and on appeal. The widow received no benefits despite the fact that her husband’s death was clearly work-related.

If you own your business and are considering opting out of coverage for yourself, make sure that you have adequate disability and death benefits from other insurance that cover work-related injuries. And if your corporate employer asks you to opt out of workers’ compensation benefits, you should request employer-provided disability and death benefits to ensure that you and your family will be protected in the event of your work-related disability or death.
Also In This Issue

Workers' Compensation for Corporate Officers

Did You Know?

Exercise May Not Be Enough
potato on couchGetting that 30 minutes of exercise a day? It may not be enough if you spend the rest of your time sitting at your couch or desk, according to an item in the April 2008 issue of Popular Science. Research at the University of Missouri-Columbia indicates that, after several hours of sitting, our bodies shut down fat- and cholesterol-burning mechanisms. Standing switches those metabolic functions back on, and calorie-burning is effectively doubled. Simply working at a standing desk or pacing while taking a phone call may be a more practical first step toward good health than focusing exclusively on intensive exercise.

Yes, Flu Bugs Do Like the Cold!Another item in Popular Science just seems to confirm what everyone knows – flu germs like the cold weather. However, many doctors actually thought that flu was most prevalent in the winter, not because of the cold weather, but because of the fact that people were packed together in doors during colder weather. It turns out that flu bugs like cold, dry weather. So be careful with that air-conditioning, too.

Useful Sites

Financial Tools Online
All sorts of useful financial planning tools at Bankrate.com. Among other tools, you'll find calculators to help you make decisions on everything from refinancing your mortgage, to buying or leasing a car, to making retirement plans. There's also a chart detailing how long you should keep all kinds of financial records.

Langsam Stevens & Silver LLP represents individuals, groups, and businesses in a wide variety of areas of law: business and commercial transactions and litigation; general business representation; personal injury; catastrophic loss; landlord and tenant; creditors' rights; collections; real estate; estate administration, planning and litigation; domestic relations; business entities; bankruptcy; finance; health care; subrogation; toxic tort defense from exposure to hazardous substances; environmental defense; environmental representation with respect to real estate and other corporate transactions; and general litigation in Pennsylvania and New Jersey.

The information contained in this newsletter is not intended to be, and should not be construed as, a substitute for professional legal or financial advice. Please do not hesitate to call us for further information or assistance.