A situation became quite heated amongst a realty operation’s partners. A limited partner strongly disagreed with actions the general partners pursued, believing that these actions would seriously affect their business’s future. The limited partner lit a fire with his comments concerning their decisions.

The backlash was quick and accompanied with high financial stakes. The complaining limited partner had to seek help from his personal umbrella insurer.

Click below to find out whether the insurer was open to coming to the rescue of its policyholder – hint, the answer was eventually decided through two levels of litigation.

The case we chose this month had everything to do with failing to keep one’s temper in check, as well as a strong need to avoid name-calling. Certainly, running a business often involves disagreements over decisions on how it’s being run. Unfortunately, a limited partner became so emotional with the general partners’ actions to sell assets and end their operation, he resorted to insults. The partners who were his targets believed his complaints rose to the level of slander. The result was their taking legal action!

Facing a lawsuit alleging slander, the limited partner asked for coverage under his personal umbrella policy. However, his insurer declined. Its position was that the claim involved business activity, making it ineligible under the policy.

Click here for relevant information about personal umbrella policies, which provide excess protection above what is provided by primary personal liability insurance. It is located in the Personal Umbrella section of PF&M, found in Advantage Plus.

Normally, liability protection involves harm triggered by actions that are not deliberate. Injury to others, including causing loss, damage or destruction of property that belongs to other persons is typically accidental. Liability policies commonly offer coverage in such instances.

Our hot-headed policyholder faced litigation that involved personal injury. This is a form of loss that actually springs from a limited number of intentional actions. Coverage may be available for unintended (accidental) consequences of various acts.

Click here for an article that shares more details on what actions fall under the category of personal injury. It is found in Emarketing for Agents, located in Advantage Plus.

Serving the coverage needs of clients is often difficult, especially when operating under assumptions. In this case, the exposure that existed for the limited partner may have been missed or improperly categorized.

The personal umbrella coverage, while recognizing the policyholder’s need for higher amounts of coverage, failed to identify the full scope of needed protection. Technically, coverage was available for defending against and reimbursing him for allegations of libel. Sadly, that protection was thwarted because the origin of his acts, business pursuits, was excluded. Applications for different types of insurance may sometimes fall short in identifying risks, and more work may be necessary.

Click here to see examples of correspondence that may be valuable in uncovering additional risks. They can create opportunities to create a fuller coverage program for a client, which means more sales too. They are from Business Building Letters found in Advantage Plus.