If you’re an executive, you’ve likely put tremendous effort into your professional life—effort that’s also helped grow your personal net worth. But are you putting enough effort into protecting that net worth? If you’re not sure how to answer that, you don’t necessarily need to worry. But you do want to act, and here’s a great first step: get a personal risk review from a personal risk manager.
In the review, you’ll confront various scenarios related to the security of not only your wealth but also your reputation—and even your loved ones. You’ll need to imagine potential events ranging from the disruptive, embarrassing and scandalous to the tragic, harrowing and catastrophic. Sounds like fun a conversation, right? Okay, maybe not. But a head-in-the-sand attitude only puts you and your family at greater risk.
The following should give you a glimpse of just how thorough – and valuable – such a review can be.
Who’s got your back? Five areas where executives are vulnerable.
1. Facing your exposure
Do you have the right personal liability protection?
Let’s say you or a family member are involved in a car accident in which another person is killed or seriously injured. Not only could the resulting lawsuit drag on for years; the damages against your estate could threaten your net worth. Your auto liability insurance simply won’t be enough to match the damages from such a lawsuit. Thankfully, umbrella policies can supplement your risk exposure—but then you want to be certain you have enough coverage.
2. If your home isn’t standard, your homeowner’s insurance policy shouldn’t be either.
Should your home suffer damage from a fire, tornado, or plumbing disaster, the last thing you want to discover is that your coverage was inadequate. Yet that definitely can happen—especially with luxury homes. You want a policy with fully guaranteed replacement costs. You also want a carrier that specializes in the high net worth market. That way your claim will be handled by an adjustor who understands the value of, for example, rare art and furnishings, custom-made items and the professional design services that may be required in the event of a loss. (On a related note, think also of yachts, classic cars, or similar high-value items. Your current policies could be woefully inadequate.)
3. If the unthinkable should happen: kidnapping
The experience of a family vacation, mission trip or exotic excursion can be priceless. But if these situations put you in higher-risk areas of the world, you may want to think about personal kidnapping/ransom insurance. Companies that specialize in this type of exposure can also provide negotiation services, act as a liaison with law enforcement and offer access to risk forecasting services.
4. Financial risk is only one facet of identity theft: make sure you can get it all back
Financial identity safeguards may indeed be getting more sophisticated. But so are the thieves. In the aftermath of identity theft or fraud, at least your banking and credit card accounts will be insured. But your identity—and the long and complicated process it’ll take to restore it—will be the real challenge. You’ll want to use the services of an identity restoration company as early in the process as possible.
5. Protecting your most priceless asset: your reputation
If you (or a family member) are somehow connected to an accident, crime, or scandal, media outlets will be first looking to learn more about you. And how will they establish that? By the existing information that’s “out there.” A good PR consultant can make sure the positive work you’ve been doing for your company and community are the first things people encounter when they Google you. Along with that, having a PR crisis plan in place can be crucial to minimizing the damage to your reputation.
It’s Your Move
Remember, you’re not an average household. The way you manage your risks should reflect that fact. Talk to a personal risk manager and set up a risk review. The results could put you in a much better position to prevent – or at least control – potential losses and exposures.
Source: This information was featured in a BizInsights article, published on September 13th, 2016.