Limit Liability

Umbrella Insurance
Three Rules of Insurance


Larry Harb: 

So, let’s talk about three steps to limit your liability. First and foremost, if you do an auction for anybody, make sure you have a signed contract. Second, in your contract, you should have the words that the seller’s responsible for insuring the property. Okay? And how many of you’ve ever been asked to be named as an additional insurer? Your seller wants you to name them as an additional insurer. Yeah, it happens all the time. We see that a lot. If you’re the fair grounds or go to municipality, they don’t want the liability. They want your insurance to be the liable one, okay? And they take and say, name us as an additional insurer on your policy. Well, the truth is, if you go out to a third-party location, you go out to that farm, and you’re selling off the real estate or selling off the personal assets—you don’t know what’s on that farm. I don’t want your insurance to be on that farm. So, what I want you to do, is to have them have insurance, and then you as the additional insurer.

Male Speaker: 

Are we speaking about liability at this point?

Larry Harb:

Yes. And why are we doing that? Because when there’s that well on the farm and the kid gets out there playing in the farm and nobody’s paying attention to the kid, he falls into the well and gets hurt, I want the homeowner, the farmer, to be responsible for that. I don’t want you to be responsible for that. And here’s what I can tell you—you’re both named, but I want his insurance to pay the claim, not yours. Alright? So, I want you to be named as the additional insurer. See what I just did? I took the liability away from you and put it right back to the homeowner where it should be. I also want you to get a certificate of insurance from that homeowner. But why do I ask that? If you get a certificate of insurance from the homeowner, what it tells you is, is that they have insurance and that they’ve named you as the additional insurer. Now you have proof of that. Again, it’s another risk management technique. And, last but not least, you’re gonna have insurance. You’re gonna transfer that risk that you don’t want to the insurance company.