In the Willis Private Client Group, we provide insurance and personal risk managementsolutions for individuals and families whose vision, vocations and avocations set themapart from one-size-fits-all solutions. Helping our clients protect what they value andtreasure is a complicated task. It takes time, expertise and lots of conversation.We learnabout clients’ needs by listening to them. They learn about risk management options bylistening to us. There always seems to be more to say. This was the chief inspiration forWealthy & Wise: Managing Personal Risk, a newsletter that gives our experts inpersonal risk management the opportunity to share with our clients information andideas about some of the things that clients tell us are on their minds – and that mightbe on yours as well.

In our premier issue we look at Personal Umbrella policies – probably the best antidote toour hyper-litigious society. We talk about Travel Protection coverage, a very good idea forany person or family that travels, near or far, on business or pleasure, and wants to makesure that the protections they enjoy at home follow them as much as possible whereverthey go. We also get into the summer spirit with an eye to the practical that is of courseour forte: we offer a checklist for opening the summer house that can help ensure a fun,carefree summer.We also offer similarly seasonal advice for yacht owners on the differencebetween typical coverage for boats and the coverage that is needed for full-sized yachts.

We know you’re busy – we won’t add to your reading list but a few times a year. If nothingelse, Wealthy & Wise may act as a reminder that we are always thinking about you andworking to help you take care of and protect what you have built and what you love.

Sandra BravoWillis Private Client Group Practice Leader

Willis North America • 06/07

Issue 1 June 2007

The Personal UmbrellaPolicy – Not Just for aRainy Day By Lesa Blaser

Turn on your TV and you’re likely to seeat least one advertisement offering legalassistance to help you collect thedamages to which you are entitled for allmanner of injury and affront. If you are apotential plaintiff, however, you are alsoa potential defendant in a lawsuit.Whether or not you’re at fault, legal bills

can mount rapidly and must be paid. Asexposed as you – as we all – may be,protection is available.

Personal Umbrella policies are designedto provide you peace of mind in case ofan unexpected catastrophic event forwhich you may ultimately be heldliable. Unfortunately, a PersonalUmbrella, or Excess Liability policy, isone of the most overlookedcomponents of the personal insuranceportfolio. If you have the right policy, itshould include higher limits of liability

Wealthy & Wise: Managing Personal Risk

This is a publication of theWillis Private Client Group

coverage than those provided by your home, car and otherinsurance policies and will pay after the limits on thosepolicies (known as underlying policies) are exhausted.

It is essential to list all of your homes, automobiles,watercraft/yachts and recreational vehicles on your ExcessLiability policy. Equally important is to make sure that thepolicies for these risks have the correct liability limits.

Failure to add an insured risk to an Excess Liability policy has seriousconsequences: should you be in an at-fault accident, your ExcessLiability will not respond once the primary liability limits have beenexhausted. On the other hand, if you added a risk to your ExcessLiability policy but failed to purchase the required amount of liabilityon the underlying policy, you would be responsible for the differencein coverage until the Excess Liability policy responds.

Most policies do cover the key basic exposures: defense costs inthe event of a lawsuit, personal injury coverage for libel andslander accusations, not-for-profit directors and officers

coverage, and uninsured motorists coverage. Since no twopolicies are alike, however, you must review your individualpolicy to confirm the types of coverage it includes.

How Much Coverage Do I Need?No formula exists to determine the amount of coverage you need.According to one rule of thumb, everyone who drives a car orowns a home should have at leasta $1 million limit policy. Manyfactors contribute to the limit youneed – net worth, value of assetsowned, occupation, lifestyle,teenage drivers, etc. If you live ona body of water, own boats or jetskis and have teenage operatorsin your household, $5 to $10million in limits is not unrealistic.Remember, a good lawyer candiscover virtually anything aboutyour net worth and potentialfuture earnings. The deeper yourpocket, the higher the likelihoodof a lawsuit.

How Is this Coverage Priced?The price of an Umbrella policy is based on three main factors:

• The dollar limit of coverage• The number of properties owned or rented• The number of cars/watercraft/motorcycles owned

Several factors affect the underwriting of an Umbrella policy,driving records being one of the most obvious. Tickets and/oraccidents can have a substantial negative impact on yourUmbrella underwriting experience.

Anyone pursuing full personal coverage should not overlook theExcess Uninsured Motorists coverage available under someUmbrella policies. The number of drivers on the road withoutinsurance or with only state minimum coverage is staggering.Excess Uninsured Motorists coverage can protect you and yourpassengers in the event that an uninsured or underinsured driverstrikes you.

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Unfortunately, a Personal Umbrella, or ExcessLiability policy, is one of the most overlookedcomponents of the personal insurance portfolio.

Attention readersliving in Delaware,Minnesota,Nebraska, Iowa and Maine!

You live in the fivemost litigious states inthe US, according to a2007 study producedby Harris InteractiveInc. for the US ChamberInstitute for LegalReform.

But It Won’t Happen to Me – Will It?To be held liable for personal damages, you do not need tocommit gross negligence. Consider the following scenarios.

• You are a driver with a clean driving record – no tickets oraccidents. You glance away from the road for a minute anddon’t see the light has changed. You hit the brakes and slideinto the intersection, barely hitting a car that had begun tocross the street. The driver of the other car is pregnant, as isher cousin sitting in the passenger seat. Fortunately, neitheris seriously injured; however, they are both rushed to theemergency room, fetal monitors are attached and bothrequire hospital stays. The trauma of the accident has one ofthe victims so paralyzed with fear over the thought of losingher baby she suffers severe mental anguish. The otherwoman has a high risk pregnancy and she is now confinedto bed rest for the remainder of the pregnancy. The policeissued you a ticket at scene of the accident and you areresponsible for the damages.

• You’re having a new flat screen TV installed in your livingroom, and you put down some rugs to protect your woodfloor. While carrying the TV in, one of the installers slips onone of the rugs and hurts his back. He is unable to return towork for months, and you are responsible.

• Your daughter, a straight-A student and captain of thevolleyball team, is on her way home from school and givinga friend a lift. A dog runs across the road. She panics andswerves. The car goes off the road and the passenger isthrown from the car. Her legs are crushed and she willnever walk again. She’ll need in-home nursing care formost of the rest of her life. It’s a single-car accident; yourdaughter is at fault.

These scenarios were all drawn from real insurance claims anddemonstrate what can happen to anyone in the blink of an eye.Reviewing your limits or discussing a quote on a PersonalUmbrella policy with a personal insurance professional onlytakes a few minutes. The potential benefit is incalculable.

Getting Ready for SummerBy Mark Battat

Memorial Day is the official start ofthe summer season, and manypeople aren’t ready for it. In therush of a busy life, properpreparation for summer at aprimary or summer residence isoften neglected. However,following a thorough checklist isan easy way to help ensure thatyour home is ready for the seasonand may save you much time andexpense in the long run. Here is achecklist to get you started.

1. Hire a licensed roofer to check for damages incurred duringwinter storms, such as missing or loose shingles. Makerepairs. If you live in a house where utility wires are aboveground, make sure the connections are checked and secure.Again, make repairs as needed. Several parts of the countryexperienced ferocious weather this winter, and many powerand phone lines took a beating.

2. If your house has wood siding, check as much of it as possible.Siding can break due to house settling or wind-blown objects.Replace damaged boards. Not doing so may allow dry rot tofester, causing even more damage. Before painting the boards,make sure they are primed on both sides and that there is acaulking/sealant around them to prevent future water damage.

3. If your pool is on a solar heating system, make sure yoursolar panels are clean and free of debris. If your panels areon the roof, have your roofer check that the panels are clear,intact and free of cracks. If your panels are mounted atground level, make sure you have no grasses or scrub oaksgrowing underneath. These can hurt the panels. Repair anycracked or broken panels immediately.

4. Because dry grasses spread wildfires quickly, remove any drybrush around your property. If you have large amounts ofgrasses, hire a professional mower to cut the grasses at the root.

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5. Trim all trees and shrubs, especially those near your house. Makesure that no leaves or limbs touch your roof. Remove any trees,such as eucalyptus, which are prone to explode if they catch fire.

6. Don’t forget to set your lawn sprinkler time clock(s). Checkall sprinkler heads to make sure they are operating properlyand fix any that were damaged during the winter.

7. If you use a pool maintenance service, see that they properlyprepare your pool for summer by completing a full filter cleaningand making sure that your heater or solar system as well as yourpool cleaner, chemicals and safety gear are in perfect order. Ifyou take care of your pool yourself, you may want to call aprofessional for a one-time appointment to service the filter; notonly is it time consuming, but it is difficult to do.

8. Have your family practice water safety techniques (seehttp://www.redcross.org/services/hss/tips/healthtips/safetywater.html#homepool).

9. If you have young children living with you or visiting, makesure that your pool area is fenced with a locked gate. Smallchildren must be kept away from the water at all timesunless an adult is present.

10. If your house looks dingy, try washing it. Before tackling thisjob, however, talk to your painter or paint store owner, asthere are special products available to safely wash a housewithout destroying the paint.

11. Summer is a good time to get rid of any hazardous chemicalsstored around your house or outbuildings. Find out if thereis a hazardous materials program in your area. Somecounties dispose of such materials at their main dump,

others at specified locations on certain days. Never pourthese chemicals down the drain! Counties develop specialdisposal programs for your and your community’s safety.

12. Power wash your driveways and walkways, especially if youhave any stone walkways. This year’s heavy rains meanheavy mildew, mold and moss on many walkways anddriveways. Clean up these areas to prevent slips and falls.

13. If you have a wooden dock or pier, make sure the boards aresanded clean and a high-quality stain or varnish is applied.Alsosee that any steps you have attached to your pier have non-skid treads installed. Replace the treads before they are worn.

14. Check all outdoor lights and replace bulbs that have burned

out. If you have motion detector lights, wipe the detectorelement with a damp cloth.

15. If you use an outdoor barbecue, remove the grill plates andscrub them as clean as you can. Use a wire grill brush toremove the hardened grease, then switch to a steel woolpad. This will help prevent grease fires and splatters.

16. Check all outdoor umbrellas to make sure they are inproper working order. If you have a crank-operatedumbrella, use spray lubricant on the shaft so the umbrellacan slide up and down easily.

Please note that this list is by no means complete. While we haveendeavored to identify the more common acts or conditions thatcan contribute to an accident or loss, it cannot be assumed thatwe have identified every loss potential or hazard. So add to thislist and start in. Following these simple steps now will help youand your family enjoy a carefree summer.

4 Willis North America • 06/07

Before You Prepare to Hoist SailBy Brian Olive

You’re ready. Your yacht is scrubbed, the galley is stocked. You’vestudied your charts, plotted your course and scheduled yourmoorings. Before we wish you bon voyage, though, onequestion: have you checked your limits? We don’t mean yourlimits as a sailor – we mean your insurance policy.

Insurance for yachts is a tricky matter, and yacht owners areoften unaware that their coverage may be inadequate for theirexposures. Two factors jump to the fore: how far you are sailing,which is addressed by navigational limits, and the length of yourboat, which dictates whether or not you are subject to maritimelaws and potentially complex liabilities

When Is a Yacht Not a Boat?Many yacht owners buy coverage from a direct writer. They mayhave asked a friend at the marina, who suggests a carrier, andtheir search for coverage is done. Direct writers generally offerboat policies, and just as a boat is not always a yacht, a boatpolicy is not a yacht policy. The legal dividing point is 26 feet. Avessel longer than that should be covered by a yacht policy.

The maritime law that applies to yachts longer than 26 feetincludes the Jones Act and the Longshore and Harbor Workers’Compensation Act (also known as USL&H). These and other lawsset out legal responsibility in several areas, includingenvironmental recovery, fees for pollution, workers’compensation for boat workers at sea, etc. These exposures arecovered under the typical yacht policy.

Yacht Policy vs. Yacht PolicyNot all yacht policies are the same, of course. Several questionsmust be answered in evaluating your yacht policy.

• Does your policy provide Watercraft Liability or Protection &Indemnity coverage?

• How will your policy respond to a salvage claim?

• Does your policy have a sublimit for pollution coverage?

• Does your policy pay on an agreed-value or actual-cash-value settlement basis for loss to the hull?

• What coverage is provided for wreck removal?

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A Word to The Wise

“Thunder Roars, Go Indoors!”

Among natural hazards, lightning is often not takenseriously; and yet, according to the National WeatherService (NWS), lightning is one of our deadliest weatherphenomena. Dozens of people are struck by lightning eachyear, according to the NWS.

In an effort to reduce thenumber of deaths and injuriescaused by lightening, the NWSis sponsoring Lightening SafetyWeek June 24-30, 2007. TheNWS is part of the NationalOceanic and AtmosphericAdministration, whose web siteis a rich resource for informationon how to protect yourself, yourpets and your loved ones in thunder and lightning storms,as well as articles such as “History and Mystery of Lighting”and survivor stories. Visit www.lightningsafety.noaa.gov.

• Does your policy exclude coverage for mechanicalbreakdown?

• Is your tender covered if it is being towed behind your yacht?

Any of these issues can have an enormous impact on a yachtowner. In regard to the salvage question, for example, a recentmarina fire in the Seattle area brought home this point forseveral owners. Several yachts caught fire and were completelydestroyed – except for the hull, which sank to the bottom of theharbor. In some cases, the cost of the vessel was covered, but thelimits of the policy were exhausted. The owners’ financialburdens were not exhausted, however. They were responsible forthe cost of retrieving and disposing of the sunken hull. Theirinsurance policy was no help.

Salvage coverage and Protection and Indemnity coverage (P&I)are two features you should be especially sure to look for in youryacht policy, but you should have answers to all of the questionsabove before you step on board.

Sailing to the Ends of Your Navigational LimitsVessels are not usually covered on all of the seven seas. Policiesare rated for operation within specific boundaries and may notrespond if you inadvertently go beyond those limits. It is crucialto know what those navigational limits are and be aware of thepotential consequences and options should your plans call fortravel beyond those boundaries.

We received an inquiry recently from a client who planned a tripto Alaska and wondered if his navigational limits extended thatfar. They did not, but we were able to arrange an endorsementextending the limit.

As important as navigational limits may be, they are not the onlyindication of the breadth of a policy. One owner we know, whose 54-foot vessel is more than double the length which separates a yachtfrom a boat, was singing the praises of his boat policy, which heacknowledged was designed to cover boats up to 26 feet. He likedthe navigational limit, which was up to 100 miles off the coast of theUS or Canada. His policy would likely cover him everywhere he mightsail, but it would not cover many of the exposures he faced.

Covering the LargestJust as the issues for boats differ from those for yachts, thelargest yachts also present exceptional protection issues.Fortunately, the yacht insurance market has matured, andcoverage options now include many that are available tocommercial vessels. This may require the assistance of anexpert partner in marine insurance, but yacht owners canparticipate in P&I clubs, giving them access to more than $4billion liability limits. Arranging programs for charter vesselsis also more facile with this approach. A broker partner canalso provide access to personal and crew benefit schemes.Access to the London hull markets and utilization ofincreased value cover can help reduce hull premium andimprove protection.

None of these issues should be troubling you or your familywhen you are on the water this summer. That’s why it’s best toaddress these issues well in advance of your launch.

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Are You a Globe Trekker?By Alan Chang

Whether you or your family travel for business or pleasure, awell-rounded Travel Protection policy is critical. This isespecially true for high-net-worth individuals and families whotravel extensively.

The marketplace offers several good options. AIG’s InternationalServices, Chubb’s Signature Passport, and Prestige Destinationsfrom Fireman’s Fund all offer specialized protection withconcierge-level services for those who frequently travel abroad.These programs offer protection in two areas: medicalemergencies, including medical transportation, and unforeseentravel-related circumstances.

The medical coverage pays for necessary emergency medicalevacuation, repatriation and escorted tour services up to$250,000 (higher limits are available). This includes transport tothe nearest medical facility that is equipped to meet yourmedical needs, a crucial service given the wide range of medicalservices available around the world. The coverage also provides

emergency health and dental care whenever you are more than100 miles from home. With this extra layer of protection, youare covered, whether you are on a long car trip or a remoteAfrican safari.

Coverage for unforeseen travel-related circumstances includes:

• Transportation incidents causing accidental death,dismemberment or disability ($150,000 per adult and$10,000 per child)

• Trip cancellation resulting from illness or accident, terroristincident or natural disaster ($1,500 per person)

• Baggage lost, damaged, stolen or delayed ($1,500 per person)

Travel Insurance vs. Credit Card CompanyCoverageTravel Protection policies offer innovative coverages andconcierge-level services for the business and leisure traveler thatfar exceed the commonly available travel insurance offeredthrough major credit card companies.

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Travel Protection Coverage Credit Card Company Coverage

Annual policy to cover you on any trip at least 100 miles fromhome

Per-trip basis only. Coverage is dependent on the travelexpenses charged

Family coverage protects you and family members or domesticpartner living in the same household

Cardholder coverage only

Emergency medical transportation Referral only

Emergency medical/dental coverage Not covered

Baggage delay Not covered

Unlimited travel concierge services Varies per company

Travel Protection in Action

• Responding to a Terrorist Attack inSoutheast AsiaA policyholder, badly burned in a terrorist explosionat a disco in Bali, Indonesia, requested and receivedthe best possible medical care in Singapore. He paidnothing out of pocket for medical expenses. Wehelped arrange a visit from his brother and helpedkeep the rest of the family informed. When it was safefor him to travel, we arranged air ambulance service tothe US and transfer by helicopter to a local burn unit.

• Medical Assistance in EuropeA policyholder’s daughter alerted us to her father’sadmission to a military hospital in Rome for thoracicaortic dissection. The facility wasn’t able to treat aheart condition of this severity, and the Air Forceneeded two days to evacuate the patient. Withinthree hours, he was on a private, medically equippedplane with a doctor and nurse heading to a cardiacspecialty hospital in Monaco. Doctors operated on himimmediately upon arrival. After the patient wasstabilized, we arranged for his repatriation to the US.The policyholder’s daughter credits us with saving herfather’s life.

• Rescue at SeaA policyholder on a cruise suffered several strokes. Thefirst occurred when the cruise ship was docked on thecoast of Tanzania. Unfortunately, the closest hospital inTanzania didn’t have adequate treatment facilities.Within an hour, a helicopter transported the patient toa facility in South Africa better equipped to handle thesituation.

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Sandra BravoExecutive Vice President /Practice Leader212 837 0814sandra.bravo@willis.com

Nova GunnNational Service Officer212 380 5383nova.gunn@willis.com

Jim Jameson – New York Senior Vice President Areas: National Accounts New York212 820 7412james.jameson@willis.com

Sharon King – Radnor, PAVice President / ManagerAreas: Pennsylvania,New Jersey, Delaware610 254 5610sharon.king@willis.com

Joseph Clark – Radnor, PAVice President / Business DevelopmentAreas: Pennsylvania,New Jersey, Delaware610 254 5664joseph.clark@willis.com

Lynn Killeen – Bethesda, MDSenior Vice President /Business Development Areas: Chesapeake Region301 581 4256killeen.lynn@willis.com

Janet Rosin – Phoenix, AZSenior Vice PresidentAreas: Arizona, Nevada602 787 6055janet.rosin@willis.com

Lori Caldwell – Knoxville, TNAsst. Vice President / Manager Areas: Tennessee, Kentucky865 583 3769lori.caldwell@willis.com

Mark Battat – San Francisco, CABusiness DevelopmentAreas: California415 955 0242mark.battat@willis.com

Brian Olive – Seattle, WAAsst. Vice President / Business DevelopmentAreas: Washington, Oregon206 386 7404brian.olive@willis.com

Alan Chang – Chicago, ILVice President / Business DevelopmentAreas: Illinois, Michigan,Wisconsin, Minnesota312 621 4945alan.chang@willis.com

Lesa Blaser – Dallas, TXVice President / Business DevelopmentAreas: Texas, Colorado,Southeast Region972 715 6265lesa.blaser@willis.com

Canada Operations:Irene Dick – Toronto, CanadaSenior Vice President416 216 0775dick.irene@willis.com

Trish McClintick – Vancouver, BCVice President604 605 3692mcclintick.trish@willis.com

Wealthy & Wise provides a generaloverview and discussion on a wide rangeof topics. It is not intended, and shouldnot be used, as a substitute forprofessional advice in any specificsituation.

Key Contacts

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