Umbrella Liability Insurance: Protection for Your Retirement

By Mark Thomas, CLU, ChFC
See if you can guess what these AICPA Personal Liability Umbrella Insurance claims have in common:
  • While changing lanes, a driver strikes another vehicle, driving it off the road.  A 17-year-old is ejected from the other vehicle and remains in a coma.  Cost of claim:  $5.1 million1
  • A driver swerves to avoid a metal object on the highway and runs over a man changing a flat tire on the side of the road, killing him.  Cost of claim:  $5 million1
  • While on the bay, a boat owner is momentarily distracted and collides with another boat, causing the driver of the other craft to suffer a skull fracture and hearing lost.  Cost of claim:  $1 million1
What do they have in common?  All of the incidents involved CPAs. All of the incidents resulted in shocking, catastrophic injuries.  All resulted in litigation.  And each of the insured CPAs had a personal umbrella liability policy. 

As the term ‘umbrella’ suggests, an umbrella liability policy extends the limits on your personal property and casualty policies, such as your auto, homeowners, boatowners, recreational vehicle or motorcycle policy.

Now let’s imagine the CPAs involved in the above accidents were nearing retirement.  What if they did not have an umbrella liability policy?  What if all they had was the $500,000 of liability insurance on their primary policy?  What would happen to their retirement savings?  

Each would be looking at a judgement against them.  In some states, qualified retirement plans like a 401(k) are exempt from court judgements.2  If you do not live in a protected state, or if your retirement savings are not in a vehicle like an IRA, you could be forced to liquidate them to satisfy a judgement.

In the accidents described, without an umbrella liability policy the CPA may lose their retirement savings—maybe even their homes2—making a personal umbrella liability policy an easily accessible, affordable method of protecting your retirement and other assets.

An umbrella becomes vitally important when planning retirement

If you’re like most CPAs, you’re good with money.  After spending years building up your retirement savings, the last thing you want is for an unexpected catastrophic accident to wipe it all out  with one lawsuit.  The umbrella liability policy is your key instrument for helping to protect your assets.

AICPA Personal Umbrella Liability Insurance Plan statistics

Over the past five years, the AICPA Plan has paid out $43 million on 45 claims, for an average cost of $957,038 per claim.  The majority, 75%, were settled for an amount under $500,000, although 13% were settled between $1 million and $5 million.1
  • 92% of claims are due to automobile accidents
  • 6% are due to home accidents 
  • 2% are due to boating accidents
As you get older and attain retirement age, here are some things to consider that may impact your risks:
  • When driving, your night vision and reaction times are not as good as when you were younger.
  • Though your children are grown, you may find yourself driving your grandchildren to activities.
  • Retirees often take on volunteer work, which may entail driving with passengers in your vehicle.
  • You may decide to travel, which may mean more time behind the wheel in unfamiliar locations.
  • If you own a second property, you may find yourself making more trips there.
  • You may find yourself spending more time on social media.  Though rare, libel/slander claims do occur and are covered under an umbrella policy.

To learn more about the AICPA Personal Liability Umbrella Plan and how it can help protect your retirement savings, speak with an AICPA Risk Advisor at 800-223-7473 or visit​. 

1Claim examples and statistical claim data supplied by CNA, the underwriter of the AICPA Personal Liability Umbrella Plan.

2Laws regarding retirement account and home ownership exemptions from lawsuit judgments vary by state.  Check with your legal professional for more information.

Mark Thomas CLU, ChFC is a senior vice president on the Aon Professional Firms team.  Mark has over 35 years’ experience helping individuals manage risk in their personal lives. You can contact him at

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