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Liability Limits and you – Choosing appropriate limits

Written by: Claudio Cipriani

Article Overview: Helping businesses choose legal liability limits

Liability Limits and you – Choosing appropriate limits

I have just returned from vacation – it was a great time – and upon my return I heard about a transport truck that collided with the overpass of the 404 while traveling eastbound on highway 401. From experience I know that when you get into a car accident, the city usually requires that you pay for any damage to road or highway infrastructure that you caused.



Special attention should be drawn to this case because of the nature of the damage that could have occurred. Apparently the transport truck was carrying a material that when ignited, burns at an extremely hot temperature. The intense heat has the potential to compromise the integrity of the concrete and the steel re-enforcements keeping the structure together.

If this is the case, the damage to the bridge would be tremendous! Most fleets insurance policies carry $2 - $5 million of liability coverage. In this case, I would sincerely hope that the company that transports material that can cause that much damage, would carry higher limits.
The whole point of insurance is to pay for the times when the unthinkable happens – for this company, it did happen. The damage to repair a major highway overpass is probably a little more than $2,000,000? So what happens when the insurance is used up? Easy! You or your company pays for the rest!

When structuring your liability policy, you don’t necessarily have to just take the biggest limit…instead try layering it. You can start off with a $2,000,000 limit with a low deductible (say $1000), but if you add excess liability – say $3,000,000 – you will be doing 2 things:

- Increasing your coverage for less money (excess liability a.k.a. umbrella liability, is generally cheaper than the base liability)
- Increasing the coverage on your property policies as well – the umbrella blankets over other coverage

The more your vehicles are on the road, the higher the liability limit that you should have – it makes sense for your own protection and your bottom line.

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Article Tags: 5 million, blankets, bottom line, car accident, eastbound, excess liability, fleets, great time, highway 401, highway infrastructure, highway overpass, insurance policies, intense heat, liability coverage, liability limit, liability policy, property policies, transport truck, umbrella liability, unthinkable



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