How streamers can avoid getting screwed by personal liability
Today’s topic is how streamers can avoid getting screwed by personal liability. One of your best options is buying umbrella insurance. I’m not an insurance salesman, just someone who through work and study knows this is a big risk.
This is one of those things that you just need to do as an adult in the US. However, most people miss it. Let’s look a bit more in depth.
What is umbrella insurance?
Umbrella insurance is liability insurance that layers over your other insurances, kind of like an umbrella is a layer over you in the rain. Umbrella insurance doesn’t start until your previous insurance ends. For instance, if you have auto insurance that covers for up to $300k for accidents you would be in trouble if you were at fault in an accident with more cost than that. However, if you had a personal umbrella insurance policy it would kick in to cover the amount over your auto policy. You would see the same situation with homeowner’s insurance.
The majority of the time you’d claim on an umbrella policy is due to auto accidents. They’re much more frequent than homeowner’s issues. However, it is also possible that your umbrella policy could cover things your insurance doesn’t otherwise cover. Some of the common examples are personal liability issues that your homeowner’s insurance excludes. These would be things like slander or libel.
Why should streamers care?
You should care for a couple of reasons. First, you should care because it’s relatively cheap coverage that can save you if things go wrong. For instance, my wife and I have a $1mil umbrella policy. It costs us $17.25/month. Not bad, huh? That’s only $207 annually. I’m more than willing to pay that amount to save me the financial ruin we’d face if one of us were at fault in an accident that went over our auto limits. Hospital bills for car crashes are expensive!
Second, people get sued all of the time. Personal injury suits (and the like) often run into the seven figure range. The figure I’ve seen is 13% of those suits are over $1 million, though it would take a lot less than that to ruin me financially. An umbrella policy can help you cover those costs if they come up.
The final, big reason you might care is for the extra benefits umbrella insurance provides. As a public facing figure who sometimes does reviews of games, you’re subject to more BS libel/slander claims. Most personal umbrella policies specifically exclude libel/slander from your business so you should see if your umbrella might cover it. If not, you would want to look at business insurance.
How do I buy it?
There are two ways to buy umbrella insurance and both have different benefits. The first is to search for a policy yourself. Many major insurance companies offer umbrella policies and you can take some time to compare the coverage and cost. If you already have homeowner’s insurance or auto insurance through someone it’s a great idea to go with them. That way, you know the policy you’re getting will be properly configured to start where your other ones end. It’ll take longer to research yourself but you may save some money.
The second way that works well is to work with a broker. Find an independent insurance broker and tell them what you’re looking for. They’ll be able to do a lot of quick comparisons. The downside here is the cost- you’ll pay a bit more for their services.
How much coverage do I need?
That’s up to you and it’s based on your assets. Generally, the smallest policy you can get is $1 million. That means that if you got in an auto accident and your auto policy covered $300k you’d have a total liability insurance of $1.3 million. After that, it’s how much do you think you need to protect? If you have a bunch of assets that someone might go for in a personal injury lawsuit then you should consider getting more umbrella coverage. If you’re like me and not super rich then you’re probably ok with the $1 million.
You should supplement your personal liability insurance policy with umbrella insurance. It’s inexpensive, effective, and will save you in a pinch. It may end up being something you never use but if you do need it you don’t want to be caught without it.
You don’t have to figure this out alone. This is what we do- help streamers make great money decisions. If that’s something that sounds interesting to you reach out me or schedule some time for a free consult. You can check out what I do here.