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Targeting the Rich: Liability Lawsuits


In these highly uncertain economic times, the issue of disparities in wealth, income, and taxation has become the subject of heated debate. As the controversy deepens and proliferates, research Chubb/ACE Private Risk Services, shows that many high net worth families are concerned this environment is heightening the risk they will be the target of a high-stakes liability lawsuit. Their wealth, they increasingly fear, can attract lawsuits. In addition to the financial impact, high net worth individuals fear the stress of protracted legal proceedings and damage to their reputations and ability to earn an income.

These concerns are not without basis, legal experts say. Under the widespread doctrine of joint and several liability, if more than one defendant is responsible for a plaintiff’s injury, any one of them may be held liable for the full amount of the damage award. This means that a lawyer will often concentrate on the person with the highest net worth, instead of the one most at fault.

Despite these dangers, people of means frequently fail to realize that many aspects of their lifestyle can lead to a costly lawsuit, such as employing household staff or serving as a volunteer board member of a charitable organization. They also tend to underestimate the potential cost of a liability lawsuit and misunderstand the affordability of effective protection. Consequently, they often lack both the proper types of liability insurance as well sufficient amounts of coverage.

This white paper draws from a survey commissioned by Chubb/ACE Private Risk Services of high net worth households and from interviews with attorneys representing high net worth defendants in liability cases. It introduces these disquieting trends, while presenting a five-step plan for reducing the risk posed by liability lawsuits. As more wealthy families appreciate their liability exposures in today’s charged environment, they will understand the importance of working with a qualified insurance advisor to build a comprehensive program for liability protection.