Standard homeowners and umbrella insurance policies do not include coverage for personal injuries such as intentional infliction of emotional distress, slander, and defamation. In this age of rapid and pervasive social movements such as #MeToo, prolific scandals all over the news, and the ability of social media to exacerbate matters; how do high-profile families and ultra-high net worth individuals protect themselves from potential liability and damages?

We recently sat down with FOX Thought Leaders Council member, Brian Applebee of AIG Private Client Group, a division of the member companies of American International Group, Inc. (AIG), to get an understanding of how ultra-high net worth families can plan ahead to mitigate the risks.

 
#MeToo Movement

FOX: #MeToo has brought many high-profile cases of harassment and abuse to light, however, some of these implicated individuals were found wrongfully accused and/or maliciously prosecuted. What could these folks have done to offset the damage caused by these types of situations?

Brian: We have seen an empowerment of victims to come forward against perpetrators. Clearly sexual misconduct and criminal acts are uninsurable; there is no insurance solution for those acts. However, related tort allegations such as negligent infliction of emotional distress as well as slander/defamation are potentially covered under certain policies. High-profile individuals should consult with qualified insurance brokers to establish a comprehensive risk management strategy to include broad liability coverage with personal injury coverage.

College Admissions Scandal

FOX: Switching gears. The college admissions scandal has gained a lot of media attention since it involves dozens of wealthy and famous parents. How are those who feel they were negatively impacted by the scandal utilizing policies to gain relief?

Brian: The plaintiff in the most visible lawsuit has named 46 individual defendants, alleging their roles in the massive scandal prevented the plaintiff and others from college admission despite being more qualified than the defendants’ children. The complaint asserts a cause of action for negligent infliction of emotional distress, which is sufficient to potentially trigger personal injury coverage under a homeowners policy. A component of this trend is that the defendants are high profile and wealthy. That entices plaintiffs and plaintiff lawyers to seek monetary compensation.
 
Wrongful allegations can leave anyone feeling vulnerable, but preparedness can go a long way when significant personal wealth is a compounding factor. Consider creating a proactive crisis management plan that includes triggers, notifications and (if needed) a public relations response. Consider hiring online monitoring services to detect, alert and address potential problems before they become a crisis. Some security firms, such as K2 Intelligence, offer these services. 

Social Media, Cyber Bullying and Slander

FOX: The internet and social media have interconnected our lives to the extent that one individual can easily and negatively impact another person or business simply by posting comments or information on websites or social media platforms. Care to comment?

Brian: With the proliferation of social media outlets and usage, we are seeing a whole new class of lawsuits. Generally, the allegation is slander/defamation of one’s character and societal standing. Initially, the industry was concerned about children’s behavior. However reality has shown that our adult insureds are equally capable of making these mistakes. 

We can look to the headlines for countless examples of social media exposure. One particular celebrity has been sued for defamation of character multiple times based on content in her social media posts. The “protected speech as a First Amendment right” defense has been used with inconsistent success, resulting in multiple judgments totaling three-quarters of a million dollars. Posting critical comments creates a liability risk that may or may not be defensible.

 
Standard v. UHNW Policies

FOX: Can you further explain the types of policies ultra-high net worth families should explore given the current environment?

Brian: Absolutely. As you mentioned earlier, standard homeowners and umbrella policies do not include coverage for personal injuries such as intentional infliction of emotional distress, slander, and defamation. The ultra-high net worth excess liability policies, on the other hand, automatically include personal injury, thus will respond for the examples provided above. Furthermore, it should be noted that a major exposure on these claims for the insured is the cost of defense. Therefore, having the personal injury coverage not only protects the insured from indemnity exposure, it will trigger the carrier’s duty to defend.

I also want to again stress the importance of working with an independent insurance advisor who truly understands the risks that come with personal wealth. Many families buy umbrella policies in the standard marketplace, which typically cap coverage at $5 million. If that figure doesn’t measure up to the family’s net worth, personal assets could be fair game in the event of a lawsuit. 

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Brian joined AIG Private Client Group in 2002 and has held various roles with increasing responsibility throughout his tenure. This includes roles in the field and Home Office. Brian continues to be active in high exposure and high profile claims.  Furthermore, he regularly attends mediations and trials.  

Previously, Brian spent his career in a multitude of Casualty claim roles in the Property Casualty industry working in both the Personal and Commercial industry. Brian graduated from Siena College in Loudonville, NY and holds a Bachelor of Arts in Political Science.