Excess Liability

"Can I Borrow the Car?"

A teenager’s lifestyle is fraught with activities that can cause personal injury or property damage to others. Less frequently contemplated, however, is the risk posed to their parents or guardians. In particular, families with substantial personal wealth can become easy targets for liability lawsuits.

Parental liability is the legal obligation for the acts of one’s minor children. Each state has its own laws, but typically parents may be vicariously liable in the way that an employer is liable for the acts of its employees. Parents may be held liable even if they had no direct role in the act that led to damages. They also may be sued under the theory of negligent supervision—meaning they knew or should have known and failed to take appropriate actions.

The following are common activities that increase liability exposure for parents, coupled with real loss examples:


A 16-year-old was driving a souped-up golf cart in her gated community and made a sudden left turn. Her friend was ejected from the cart, sustained a serious head injury and had to be airlifted to a nearby hospital. The accident resulted in a seven-figure settlement.

Social media

The parents of a teen blogger were sued for negligent supervision and for allowing the minor to use a “dangerous instrument” (a smartphone).


Excessive weight and improper design caused a deck to collapse during a party, injuring numerous guests and leading to a $20 million lawsuit. 

Other activities

Two teens were kayaking when the kayak took on water and tipped over. After holding on for some time, the boys decided to swim for shore. One made it, while the other drowned. The deceased boy’s parents filed a wrongful death lawsuit against the other teen and his parents—the owners of the kayak.

Useful Insurance Solutions

The best way to protect personal wealth is to obtain high limits of excess liability insurance, which responds after primary coverage is exceeded. For example, the liability limit in many homeowners policies is $300,000. If someone is injured on your property and awarded damages above that amount, you would be responsible for the remaining balance, including legal fees.

Juries have quite a bit of latitude on damage awards. Sometimes they look to make a statement when compensating victims and punishing wrongdoers. An independent insurance advisor can help determine the right kind and amount of coverage for your family. Numerous options are available to address specific lifestyle concerns, such as frequent travel or newly licensed drivers.

While insurance can help alleviate the financial burden of a lawsuit, communication goes a long way as well. Parents should talk to their kids about how to conduct themselves at home, at school, on the road and online. 

Inappropriate conduct by children may expose the entire family to financial risk. Addressing this issue proactively can preserve family wealth for generations to come.