High Net Worth (HNW) families and individuals can hold a dizzying array of assets, creating exposure to a wide variety of risks. In fact, many HNW clients have a risk profile comparable to small businesses. As a result, advisors need to encourage proactive risk management strategies as well as secure the appropriate insurance coverage in the event of a loss.
The following are some of the leading risks affecting HNW clients in Florida:
- Natural disasters and weather-related losses. Hurricanes, flooding, tornadoes, and wildfire have very different implications for HNW clients than the average individual. In addition to their personal property, many HNW clients possess collections of extraordinary value such as wine or paintings. In recent years, flooding has caused unprecedented damage. Striking well outside of FEMA’s flood maps, HNW clients need to invest in preventative loss measures as well as insurance to protect their unique assets.
- Protecting collections. Even without natural disasters, HNW clients need protection for their collections. Wine, art, family heirlooms, and cars represent specialized risks and require specific types of coverage. HNW advisors will need to look at their clients’ collections both as a whole and as individual pieces. Sometimes, it is better to seek additional insurance for items with significantly more worth than a blanket policy that may fall short.
- Professional liability. Many HNW clients serve on boards but aren’t aware of what coverage options exist, if any. Even with professional liability coverage, there may be limitations or conditions that preclude coverage. Advisors need to identify the client’s risk exposure and suggest insurance options available to them to protect them, their family, and their assets.
- Security threats. HNW clients face security risks on multiple fronts: home security, travel safety, and cyber threats are all very real issues HNW clients need to address. While home security systems can help on the home front, advisors should consult with security experts for the best approach to protect HNW clients from security hazards.
- Cyber crimes. This includes data breaches, ransomware, unauthorized bank transactions, and more. HNW clients are more susceptible to this type of risk due to the number of people that communicate with them and on their behalf. Every connected device in their home or around their property represents a potential access point for a cybercriminal and HNW clients need to know best practices to reduce the likelihood of a cyber-related loss.
Advising HNW clients is a multifaceted task that requires a honed set of skills. The experts at MMA Florida are intimately familiar with the risk profile HNW individuals face in the state of Florida and can offer advice on how to prevent, navigate, and manage them. Contact us to learn more.