When a law suit in negligence of some kind is commenced, the defendant’s first step will often be to check their liability insurance policy to see whether they are covered. If they are so covered then of course the insurer needs to be notified of the claim, and the insured defendant will also want to inform the insurer about whether they believe the claim is justified and whether they want to defend it and the grounds of the defence. Matters then take their course but the limit on the insurance must always be borne in mind in the light of the high level of damages commonly sought.

Negligence claims will consist of two elements: compensation for actual financial losses incurred as a result of he alleged negligence, and compensation for the less quantifiable elements of the damage such as pain and suffering.

On the face of it one would think that the financial losses would be easy to pre-assess in order to calculate how much insurance cover you should purchase, and that the general damages would be harder to guess at in advance. However in practice, the financial section of the claim is likely to be the largest part as it includes medical expenses and loss of earnings which can mount up to enormous figures. Damages can thus easily amount to a greater sum than that provided for in your liability insurance policy.

If you participate in any walk of life or activity where negligence claims are a common phenomenon, you need to consider taking out a top-up form of insurance which is known as umbrella coverage. This cover is meant to provide additional protection after normal policies have used up their applicable limit. Because of the huge possible size of negligence claims it can be just common sense to buy this extra safety net, up to an amount which safely exceeds the maximum claim that you could expect. Such cover is, surprisingly in view of its high financial level, not particularly expensive.

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