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Memorial Day marks the start of the high personal risk season for physicians and their families. Here are five of those risks - and how you can mitigate them.
The period from Memorial Day to Labor Day is widely known as the 100 deadliest days in America. It’s the time of year when accidents, injuries and their respective liabilities all spike.
Automobile accidents typically claims more than 1,000 lives every summer, an especially dangerous season for newer drivers, including both teens and young adults. During summer vacation, these drivers have more free time and engage in more recreational driving, stay out later and drive around with friends. With older teens, drinking and recreational drug use often increases as well.
Regardless of the specifics, you will likely be held liable for the actions of your children who drive your vehicles, including both minors and adult children. Here are four recurring - yet preventable - causes of deadly accidents according to safety organizations National Safety Council (NSC) and AAA.
Speeding is a factor in approximately 30 percent of fatal crashes involving teen drivers, according to a recent AAA survey. The survey also found that driving instructors named speeding as one of the three most common mistakes teens make when learning to drive.
In 2015, 60 percent of teen drivers killed in a crash were not wearing a seat belt, according to AAA. Seat belt use has been proven to significantly reduces risk of death or serious injury in an accident.
Distraction plays a role in nearly six out of 10 teen crashes, four times as many as official estimates based on police reports, according to AAA. The top distractions for teens include using a smartphone and other vehicle passengers. In fact, just one teen passenger increases crash risk by 44 percent, according to findings from the NSC. Social networking sites such as Facebook, Snapchat and Instagram are full of teens (and adults who know better) who are taping and photographing themselves while driving.
The AAA survey found that 36 percent of all motor vehicle fatalities involving teen drivers occurred between 9 p.m. and 5 a.m., and 10 percent of all motor vehicle nighttime crash fatalities involved a teen driver. AAA also noted a 22 percent increase in the average number of nighttime crashes per day involving teen drivers during the 100 deadliest days compared to the rest of the year.
Please remember that the same factors that contribute to auto accidents create many other kinds of exposure. More free time, more friends and less supervision can also lead to risks to their life and your assets for incidents involving:
Next: How to mitigate your risk
As with many other asset protection issues for physicians, these recommendations will look familiar (for good reason).
You can only manage these risks before there is an accident. This includes legally separating your assets and liabilities and using legal tools that limit your risks. Any action you take to protect yourself after an accident will likely be considered fraud and fail. I routinely turn away clients looking for help from a serious auto accident that has already occurred - and it’s also often a parent who was driving.
This means acting as an authority figure, setting and enforcing rules, and teaching and requiring safe driving habits. Explain to children that they must obey curfews in order to use your vehicles and maintain privileges at home or other properties. Telling the courts “They don’t listen” is not a winning legal defense.
The aggressive litigation climate, high cost of cars and high costs of medical treatment all require that a personal liability umbrella policy on your home and automobiles of $2 million or more is now the minimum for all successful professionals, and those with teen drivers in particular. Your coverage should include all vehicles your children have access to such as boats and all-terrain vehicles as well as any other “toys.”
Don’t have your personal vehicles owned or leased by your practice. This tax deduction strategy makes your income-producing medical business liable for every accident you, your spouse, kids, nanny, or brother-in-law may be involved in with your vehicle.
Ike Devji, JD, has practiced in the areas of asset protection, risk management, and wealth preservation law exclusively for the last 15 years. He helps protect a national client base with more than $5 billion in personal assets that includes several thousand physicians. He is a contributing author to multiple books for physicians and a frequent medical conference speaker and CME presenter.