Umbrella insurance as a strategic shield against major liability and financial exposure

Liability and financial exposure arise from three natural sources: first, living in a society where people and organizations freely associate in markets, engage in transactions with each other, and act on behalf of each other and a collective dominated by relatively few government bodies, private institutions, and public agencies; second, having vast sums of money and highly visible assets placed at risk; and finally, being exposed both individually and through various forms of representation, authority, identity, and sponsorship for actions - and inactions - that are deficient and neglectful in the eyes of the public and others. In effect, an increasing share of society's increasing wealth enhancement and income generating activities create heightened liability and financial exposure for individuals and organizations. The legal context for this shift is the gradual reduction in the limits of liability for harmful acts and omissions both through enforcement of statutes mandating clients' welfare and protection, as well as case law.