This Preventive Law Alert was written by: John Goodson, Colleen Manley and Christine Goodson Forakis.

Wealth Preservation and Preventive Law Special Alerts are patterned after an annual publication to all mountain climbers called "Accidents in North American Mountaineering" which writes up all mountaineering accidents describing the accident, what caused it, how it may have been prevented so that further mountain climbing catastrophes may be avoided. Wealth Preservation and Preventive Law Special Alerts are the equivalent of "Legal Accidents in North American Law" – a description of the legal catastrophe and how it may be avoided using preventive law techniques.

Jim and his business partners spent hundreds of thousands of dollars building an incredible Southwestern-style restaurant at a prime location in Phoenix, AZ. It wasn't long after they opened when the customers began to flood in to the restaurant in droves. Everything was great as Jim and his partners were making large sums of money.

Then it happened. They sent one of their waiters to pick up some groceries in their service car. He quickly sped across the parking lot to the road. Seeing a motorcycle driving down the road toward him, he stopped suddenly. The motorcyclist mistakenly thought he was going out onto the road and quickly swerved left to avoid him. The motorcycle flipped and threw the motorcyclist from the bike, seriously injuring him. The biker ended up breaking his neck, and unfortunately, was told he would never be able to walk again.

Although tragic, when Jim heard of the news of the accident he thought to himself, "No sweat. I'll have our property, casualty and liability carrier take care of everything." However, when he contacted the insurance company he was informed that the policy he had only covered cars driven by the owners. The liability claim that followed the accident was well into the millions and was far too much for the owners of the restaurant to pay. They lost everything. In this particular case, when they purchased the policy the agent did not tell the owners that cars driven by people other than the owners would not be covered.

To avoid this type of coverage calamity, when you purchase a property, casualty, and liability policy, insist that the broker or agent write you a letter telling you specifically what is NOT covered by the policy. This is necessary so that you may deal with the policy restrictions before an accident occurs. It is also a good idea for the insurance company to identify who in the company is your agent of record so you know whose statements to rely on.

Had Jim insisted on this procedure before the accident, most assuredly, he and his partners would have insisted on paying for coverage of their employees or at the very least made a rule that no employee could drive a vehicle on company insurance.

We help prevent legal accidents in North America!!

For additional information, please call (602) 252-5110.

www.goodsonmanleyforakis.com

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Phoenix AZ 85004-4610

ph: 602.252.5110
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