Perspectives on Risk, Wealth & What Matters Most

A best-practice guideline for preparing your facility or home for the safe use and storage of batteries and energy storage systems.

The Growing Risk

Lithium-ion (Li-ion) and lithium-polymer (Li-Po) batteries now power nearly every corner of modern operations: cordless tools and equipment, material-handling fleets, electric vehicles, micro-mobility devices, and the large stationary energy storage systems (ESS) that stabilize power supply and support renewable generation. Their high energy density, long service life, and fast recharging have made them the default choice. Those same qualities, however, concentrate a great deal of energy into a small, chemically reactive package. When a Li-ion battery is defective, damaged, poorly stored, or improperly charged, it can fail violently, releasing intense heat, toxic gas, and a self-sustaining fire that conventional extinguishers struggle to control.

The scale of the exposure is growing with adoption. Since the start of 2025 alone, the U.S. Consumer Product Safety Commission has issued 46 recalls and safety warnings for consumer products powered by lithium-ion batteries, and several high-profile facility fires have reshaped how regulators, fire officials, and insurers view the hazard. For any organization that uses, charges, or stores these batteries in more than trivial quantities, the question is no longer whether to manage the risk, but how thoroughly.

This guideline is a practical roadmap for our clients. It explains how and why these batteries fail, summarizes the emerging legal and regulatory landscape, and lays out configuration-specific best practices for preparing your facility, from a handful of tool batteries on a charging bench to a container-scale energy storage system.

Understanding the Risk

How lithium-ion batteries fail: thermal runaway

Nearly every serious Li-ion incident traces back to a single phenomenon: thermal runaway. It begins when one cell generates more heat than it can dissipate, often because of an internal short from a manufacturing defect, physical damage such as a puncture or crush, overcharging, deep discharge, or exposure to excessive heat. As the cell heats, it ignites its own flammable electrolyte; that heat spreads to adjacent cells, which fail in turn, producing a self-reinforcing chain reaction. Because the reaction generates its own oxygen, these fires are difficult to extinguish, can reignite hours later, and react violently with water where lithium metal is present.

Critically, failure does not happen all at once. It escalates through recognizable stages, and the earlier the failure is detected, the more options remain to intervene.

Beyond fire: toxic and environmental exposure

Li-ion fires are not only a combustion hazard. Burning cells release highly toxic gases, including hydrogen fluoride (HF) and per- and polyfluoroalkyl substances (PFAS, the persistent “forever chemicals”), that can injure the eyes, skin, and respiratory system and require evacuation. Water used to fight a battery fire can become contaminated with heavy metals such as cobalt, nickel, copper, and manganese, creating a risk of soil and groundwater pollution if it is not contained. After the January 2025 Moss Landing energy storage fire in California, which destroyed roughly 55,000 battery modules, EPA soil sampling detected several of these heavy metals at levels exceeding screening standards in the surrounding area.

The emerging legal and regulatory landscape

The regulatory picture is shifting quickly, and it increasingly reaches organizations that merely handle batteries rather than manufacture them. In May 2023, the EPA advised that most lithium-ion batteries on the market today are likely to qualify as hazardous waste under the Resource Conservation and Recovery Act (RCRA) based on their ignitability and reactivity. The agency is now developing a dedicated “universal waste” category for lithium batteries, with a proposed rule anticipated in 2026 and a final rule expected in 2027. At the state level, Extended Producer Responsibility (EPR) programs are expanding. Illinois requirements took effect January 1, 2026, and California has enacted both stewardship-plan obligations (AB 2440) and a point-of-sale recycling fee (SB 1215). Meanwhile, some states impose stricter hazardous-waste thresholds than the federal baseline.

The liability exposure is equally significant. Under the federal Superfund statute (CERCLA), cleanup liability is strict, joint-and-several, and retroactive: facility owners and operators, parties that arrange for disposal or recycling, and transporters can all be named, and even sending a small volume of defective cells to a contaminated site can expose a company to a share of the full cleanup cost. Following Moss Landing, the operator entered a CERCLA settlement in July 2025 to fund a cleanup expected to take two or more years. Organizations once considered removed from battery operations, such as auto dealerships handling EV batteries or retailers managing consumer returns, can now trigger hazardous-waste obligations, and California penalties can reach tens of thousands of dollars per day, with criminal exposure for knowing violations.

Foundations: Selection, Inspection, and Built-In Safeguards

Buy quality; avoid counterfeits

The single most effective way to reduce battery risk is to keep defective cells out of your facility in the first place. Purchase tools, equipment, and batteries from reputable manufacturers whose products are certified to the applicable Underwriters Laboratories (UL) standards, and buy replacement batteries and chargers only from the original equipment manufacturer (OEM) or its authorized vendors. Counterfeit and aftermarket batteries frequently omit the internal safeguards that protect genuine cells and are a leading contributor to failures. Where your application allows, consider lithium iron phosphate (LFP / LiFePO₄) cells, a Li-ion chemistry known for greater thermal stability and lower susceptibility to thermal runaway.

Inspect on arrival and before every use

Establish a quality-control step so a designated employee inspects new batteries on delivery, and personnel check batteries before each use. Remove from service, and dispose of properly, any battery showing bulging or swelling; cracked, broken, or discolored casings; excessive heat during charging or use; hissing; leaking; or smoke or unusual odors. Multimeters and digital or infrared thermometers support periodic, documented health checks. Keep a Safety Data Sheet (SDS) on file for every battery on site; these drive correct storage, handling, and emergency response.

Rely on built-in protections, but not on them alone

Quality Li-ion batteries include layered safeguards: a separator that shuts down ion flow as temperature rises, a pressure-relief vent, thermal interrupts and fuses, overcharge and short-circuit protection, temperature sensors, cell balancing, and a Battery Management System (BMS) that monitors state of charge, temperature, and cell health and can disconnect the pack when it detects an anomaly. These features reduce risk but do not eliminate it; facility controls remain essential.

Preparing Your Facility by Configuration

The right controls depend on how batteries are used and stored. The practices below address the configurations our clients most commonly operate; a summary of key setbacks and standards appears in the table at the end of this section.

General and bulk storage

• Designate a single, controlled storage location for all Li-ion and Li-Po batteries: well-ventilated, dry, free of combustible materials, out of direct sunlight, and held at a manufacturer-appropriate temperature, generally about 50–80 °F (10–27 °C).
• For longer-term storage, keep cells at roughly a 30–50% state of charge rather than fully charged, and store only the minimum quantity needed; batteries packed closely together raise the risk that one failing cell will cascade to its neighbors.
• For larger volumes, keep quantities in high-hazard sprinklered areas incidental, limiting the battery footprint to about 200 ft² (20 m²) and 6 ft (1.8 m) in height, with roughly 10 ft (3 m) of open space to other stock and combustibles. Even a single pallet of Li-ion batteries can spread fire quickly, so consider relocating bulk quantities outdoors, to a temperature-controlled container, or to a dedicated fire-rated cabinet.
• Purpose-built Li-ion cabinets should be non-combustible (steel), fire-rated (commonly 90–120 minutes, to standards such as UL 94, FM 6050, or EN 14470-1), ventilated, fitted with pressure-relief/explosion venting and spill containment, lockable, and clearly labeled (for example, “Lithium-Ion Battery Storage: Fire Risk”); space multiple cabinets about 10 ft (3 m) apart.
• Bulk warehouse storage warrants a fire-protection engineering review, as it often requires segregated areas, in-rack sprinklers, higher ceiling sprinkler densities, and a strong water supply. Keep an ABC or Class D extinguisher (per the SDS) in the storage area.

Charging stations for tools and equipment

Most tool-battery incidents occur during charging. To avoid this:

• Charge only with the manufacturer-specified charger for that battery; never mix chargers and batteries across brands or use aftermarket chargers, which can defeat built-in protections. Locate charging on a non-combustible surface, away from egress routes and combustible storage, with space maintained between charging batteries.
• Charge only while personnel are present; do not charge unattended or overnight. Remove batteries from the charger once charged, allow hot batteries to cool before charging, and use charging bags or fire-rated charging cabinets where practical.
• Post charging and storage instructions at the station.

Energy storage systems (ESS / BESS)

Stationary energy storage introduces the largest concentration of stored energy on many sites and warrants a design-led approach. New systems should be certified to UL 9540 (Energy Storage Systems and Equipment) and evaluated using the UL 9540A test method, which characterizes thermal-runaway fire propagation and informs required spacing, ventilation, and fire protection; battery units should be UL 1973-listed and inverters UL 1741-certified. Installations should follow NFPA 855 (Installation of Stationary Energy Storage Systems) and NFPA 70 (Article 706). For further continuity:

• Detection is the linchpin. Off-gas monitoring detects electrolyte vapor at the earliest stage and can initiate an automatic shutdown and alarm before smoke or fire, while lower-explosive-limit (LEL) gas detection should be interlocked with ventilation to keep any flammable atmosphere below 25% LEL.
• For suppression, note that clean-agent gas systems generally will not stop a thermal-runaway fire; water-based protection is preferred (a wet-pipe sprinkler system, or an open-head deluge with a fire-department connection for container installations), with sprinkler density designed to at least Extra Hazard Group 1.
• Site ESS in a non-combustible, locked enclosure separated from the rest of the building by a two-hour fire barrier, or outdoors; keep exterior containers at least 20 ft from buildings unless rated thermal barriers are provided, and ensure the room is externally accessible for manual firefighting.
• Round out the design with supervised smoke detection, temperature monitoring with high-temperature alarms, coolant-leak detection, seismic bracing where required, emergency power disconnects, and clear signage. Because ESS are network-connected, incorporate cybersecurity into the BMS and firmware, and commission larger or custom systems with a qualified agent under a formal operations-and-maintenance program with online condition monitoring.

Material-handling equipment (forklifts and pallet jacks)

Electric material-handling fleets increasingly use Li-ion packs with decentralized “opportunity charging” throughout the operation. System best practices for this equipment include:

• Specify batteries and trucks listed to the relevant standards: UL 2580 for Class 1 and 2 forklifts, UL 2271 or UL 2580 for Class 3 pallet jacks, with UL 583 for the trucks and UL 1998 / UL 991 covering safety software and controls.
• Site opportunity-charging points on non-combustible surfaces, away from combustible storage.
• Report any physical damage to a battery or its enclosure immediately, and keep incident-response kits (fire blankets, gloves, non-combustible containment drums, and appropriate suppression media) near the equipment.

Electric vehicles and micro-mobility

E-bikes, e-scooters, and hoverboards are a frequent source of facility fires, and many jurisdictions now regulate them; in New York City, for example, e-bikes must be certified to UL 2849. As such, it is recommended that a policy be adopted that outlines the following:

• Either ban personal devices indoors, or allow only certified ones (UL 2849 / 2271 / 2272).
• Charge EVs with listed equipment installed by a qualified electrician, away from exits.

Emergency Response and Incident Readiness

Even well-run facilities should plan for failure. Build a written emergency response plan around the principle that early action and fast evacuation save lives and property. It is heavily recommended that the local fire department be contacted and made aware of the type, configuration, and location of battery systems within your facility. Having their insight and input into the development of your emergency response plan is vital.

Detection and isolation. Train staff to recognize the early signs (unusual odor, discoloration, swelling, excessive heat, hissing, or smoke) and, only if it is safe to do so, to move a suspect battery away from combustibles into a fire-rated isolation container. Keep a pail of sand nearby as a smothering agent.

Small, incipient fires. Because battery fires emit toxic fumes, all untrained personnel should evacuate immediately. Only personnel specifically trained to fight small battery fires should attempt to do so, positioned between the fire and the nearest exit; if the extinguisher is ineffective, smoke becomes heavy, or the responder is at all uncomfortable, they should evacuate. If flames are subdued, submerge the battery in sand or douse with water as directed by the SDS; sand is the safer choice where lithium metal may be present.

Thermal runaway and large fires. No one should attempt to fight a thermal-runaway or large-scale fire. Activate the alarm, evacuate the building, and call emergency services, providing the battery type and size, the location, and any hazardous materials present, and hand the relevant SDS to responders when possible.

First aid. For eye or skin exposure, flush with water for at least 15 minutes and seek medical attention; move anyone exposed to fumes or smoke into fresh air and administer first aid or CPR as needed. Because effects can be delayed, exposed individuals should be evaluated by a medical professional.

Disposal and cleanup. Never place Li-ion batteries in general waste; route them to a certified recycler, and store damaged units awaiting pickup in a non-combustible container located about 25 ft (8 m) from occupied buildings. Provide containment or retention basins to capture contaminated firefighting water, consistent with the environmental exposures described earlier.

Source: Google Threat Intelligence Group (GTIG), “Adversaries Leverage AI for Vulnerability Exploitation, Augmented Operations, and Initial Access” — May 11, 2026. This memo summarizes key findings and their implications for your organization’s risk profile.

The Big Picture: What Google’s Intelligence Team Found

Google’s threat intelligence team published a landmark report documenting a fundamental shift in how cyberattacks are being carried out: artificial intelligence has become a standard weapon in attackers’ arsenals. The following is what the report found actively occurring:

• • • AI is discovering security flaws automatically: For the first time, Google confirmed that a zero-day exploit (a previously unknown vulnerability) was developed using AI. Attackers used it to plan a mass exploitation campaign targeting thousands of organizations simultaneously.

    • Malware is now designed to fool your defenses: Russia-linked and other state-sponsored hackers are using AI to write malware that camouflages itself with decoy code, making it harder for traditional security tools to detect. One malware family included 32 repetitive, benign-looking code queries just to appear harmless.

    • Attacks are becoming autonomous: A new Android malware called PROMPTSPY operates without human supervision: it navigates your phone’s interface, blocks uninstallation by placing an invisible overlay over the uninstall button, and can be updated remotely even if its infrastructure is identified and blocked.

    • Phishing has become surgical: Attackers are using AI to research company org charts, vendor relationships, and individual employee roles before crafting personalized emails. The days of easily spotted mass-spam phishing are giving way to targeted messages that reference real people, real vendors, and real projects.

    • Your AI tools are now a target: A criminal group compromised widely-used AI software packages including a popular AI gateway tool, stealing cloud credentials that were then sold to ransomware groups. If your organization uses AI software, those integrations expand your attack surface.

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    Why This Matters for Your Business

    • • The barrier to entry for sophisticated attacks has collapsed: AI has made expert-level hacking accessible to a far broader pool of adversaries. You do not need to be a Fortune 500 company to be in the crosshairs.

      • Time-to-impact is compressing: AI automates the steps between initial compromise and ransomware deployment. Incident response windows that used to be measured in days are shrinking.

      • No organization is too small to be a supply chain target: Attackers do not always come at you directly. They compromise a software tool you and thousands of others use, gaining access to all of you at once.

      • Deepfake impersonation is operational, not hypothetical: AI voice cloning is actively being used to impersonate journalists, executives, and public figures. Business email compromise and wire fraud schemes now have an audio and video dimension.

      • Your risk profile has changed even if your operations haven’t: AI has materially increased the frequency and sophistication of attacks against organizations of every size. Coverage and controls that were adequate two years ago may not reflect today’s environment.

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    • How Insurance Responds: Key Coverage Areas to Review:

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      The Regulatory Landscape: What’s Coming and When

      AI governance is shifting from best practice to legal obligation. The regulatory timeline is compressed, and organizations that wait for binding enforcement to arrive will face a harder and more expensive path to compliance. Cyber insurance carriers and enterprise procurement teams are increasingly referencing these frameworks in applications and vendor reviews.

      

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          Where Does Your Organization Stand? A 90-Day Roadmap by Maturity

      Not every organization is starting from the same place on AI governance. Identify your current stage below, then focus your next 90 days on the actions listed for that tier.

      

      

      

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      What We Recommend Discussing with Your Advisor

      • • Audit your AI software footprint: Identify every AI tool, plugin, or third-party integration in use across your organization. Each one is a potential supply chain entry point.

      • • Review ransomware sublimits: Many policies introduced ransomware sublimits in recent years. Confirm those limits still reflect your actual exposure given AI-accelerated attack timelines.

      • • Evaluate social engineering coverage: Verify your policy covers AI-generated phishing and impersonation scenarios, and confirm that coverage does not depend on security controls you may not currently have in place.

      • • Confirm your incident response plan is current: Autonomous malware and faster attack timelines demand a response plan that has been tested within the past year. One written before AI-powered threats became standard is no longer adequate.

      • • Discuss re-underwriting if your AI usage has grown: If your organization has adopted new AI tools since your last renewal, disclose that proactively. It positions you as a more credible risk and prevents coverage disputes after a claim.

         

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        Additional Resources

        The following resources are recommended by practitioners and referenced by regulators and insurers:

        • NIST AI Risk Management Framework (AI RMF) — The primary U.S. federal standard for AI risk governance. Free, framework-based, and increasingly referenced in procurement and insurance. airc.nist.gov • NIST AI RMF Playbook — Practical implementation guidance with mapped actions for each function of the RMF. airc.nist.gov/Docs/2 • ISO 42001 Overview — The international certification standard for AI management systems. Relevant for organizations with enterprise customers or international operations. iso.org • EU AI Act Summary — Plain-language summary of the EU regulatory framework. Relevant for any organization that operates in or sells into European markets. artificialintelligenceact.eu • CISA AI Security Guidance — Cybersecurity and Infrastructure Security Agency guidance on AI security. Practical and security-focused. cisa.gov/ai • Cranium AI Governance Platform — A purpose-built tool for AI inventory management and continuous AI risk monitoring. cranium.ai

A Comprehensive Analysis of Emerging Risks, Market Dynamics, and Strategic Solutions for High-Net-Worth Individuals

The private client insurance landscape is experiencing unprecedented transformation driven by converging forces: escalating climate-related catastrophes, explosive cyber threats, nuclear verdict litigation trends, and the largest intergenerational wealth transfer in history. As we enter 2026, high-net-worth (HNW) individuals and families face a fundamentally different risk environment than existed even five years ago.

Key findings include:

1. Climate-driven property insurance costs rose 10.4% nationally in 2024, with catastrophe losses reaching $176 billion
2. Personal cyber risk exposure exploded 3,000% for deepfake fraud, with average U.S. breach costs exceeding $10.22 million
3. Nuclear verdicts ($10M+) median awards reached $23.8M in 2023, creating liability insurance crises
4. Baby boomers control $19.7 trillion in real estate (41% of U.S. total), creating complex transfer challenges
5. Protection gaps widened significantly, with only 47% of catastrophe losses insured in 2024

For private clients, their advisors, and family offices, 2026 demands proactive risk management strategies addressing these interconnected exposures while navigating an increasingly complex insurance marketplace.

The Evolving High-Net-Worth Risk Landscape

Baby boomers control $19.7 trillion in U.S. real estate—41% of total value despite representing only 20% of the population[1]. This concentration, combined with aging properties and intensifying climate risks, creates unprecedented insurance challenges.

High-net-worth individuals face converging exposures: multiple properties across catastrophe-prone regions, valuable collections requiring specialized coverage, elevated liability risks from social inflation, complex estate structures demanding policy coordination, and growing cyber vulnerability as digital wealth management expands.

The insurance protection gap has widened dramatically. In 2024, U.S. catastrophe economic losses reached $176 billion while insured losses totaled only $99 billion—a $77 billion protection gap[2]. For private clients, this reflects underinsurance from rapid property appreciation, coverage exclusions for flood and earth movement, policy sub-limits, increasing carrier restrictions in high-risk areas, and, in some cases, the choice to self-insure.

1. Climate Change and Property Insurance Crisis

The year 2025 marked the fourth-warmest on record for the United States, with 27 weather disasters exceeding $1 billion in losses each[3]. Notable events included the Eaton and Palisades Fires destroying 18,000+ structures in Southern California, Texas Hill Country’s 1-in-1,000 year flood killing 135 people, and 1,559 tornado reports—fifth-highest on record[3].

Sea level rise has doubled from .06 inches to .14 inches annually, creating 3-9 times more frequent coastal flooding than 50 years ago[4]. Combined with accelerating drought (42.8% of U.S. affected per US Drought Monitor), these trends fundamentally reshape property insurability.[4]

Insurance Market Response:

Homeowners insurance rates increased 10.4% nationally in 2024, with six states exceeding 20%[5]. Major carriers withdrew from California, Florida, and Louisiana, forcing reliance on surplus lines (up 31.2% to $5 billion) and residual markets (up 6% to $10 billion)[5]. Carriers implemented percentage-based wind/hail deductibles, roof age restrictions, and tightened underwriting standards.

For HNW clients with multiple high-value properties, this creates acute challenges: limited carrier options, higher premiums, broader exclusions, and potential uninsurability in catastrophe-prone coastal and wildfire zones where many retirement properties are concentrated.

How to address:

Home Resiliency

• Prioritize loss‑prevention tools as these steps can improve insurance options and potentially reduce premiums:
• Water leak detection and automatic shutoff systems
  Whole home backup generators
  Annual or seasonal maintenance checklists to address minor issues before they become major

Coverage Options

Review your policy for exposures such as flood, earthquake, and sinkhole to determine whether adding these coverages makes sense based on where your home is located.

Acquisitions

• Consult your advisor before making an offer—especially for out of town or out of state home purchases. This helps you ask your realtor the right questions, improve insurability, manage long term costs and make educated buying decisions.
• Consolidating coverage with one carrier can enhance program efficiency, improve eligibility for better coverage, and ensure consistency across policies to prevent gaps or overlaps in coverage.

2. The Cyber Threat to Personal Wealth

Escalating Personal Cyber Threats

Ransomware Evolution

Ransomware was involved in 44% of all data breaches in 2024, with attacks shifting to “double extortion”—stealing personal financial records, tax returns, estate documents, and smart home data before encrypting systems and threatening public release[7].

The Deepfake Epidemic

AI-generated deepfakes exploded 3,000% in 2025, enabling unprecedented fraud targeting wealthy individuals[9]:

• Voice cloning of family members requesting urgent wire transfers
• Video impersonations of financial advisors authorizing transactions
• Synthetic identity creation for account takeovers
• AI-enhanced phishing with 54% success rates—quadruple traditional methods[10]

Shadow AI Risks

Household staff and family members using unauthorized AI tools (ChatGPT, Claude) for convenience create data leakage risks as personal information may be retained and exposed.

Cyber Risk Management Best Practices

Private clients should implement layered cyber defenses:

Technical Controls

1. Multi-Factor Authentication (MFA): Strongly recommended for all financial accounts, email, cloud storage.
2. Endpoint Detection & Response (EDR): Advanced antivirus/anti-malware on all devices
3. Network Segmentation: Separate IoT/smart home devices from financial/personal computing
4. VPN Usage: Virtual private networks for all remote/travel internet connections

Interactive Best Practices

1. Wire Transfer Protocols: Verbal confirmation of all wire instructions via known phone numbers
2. Email Authentication: Training to identify phishing, suspicious links, urgency-based manipulation
3. Social Media Privacy: Limit disclosure of travel, property locations, purchases, family information

Coverage Coordination

1. Review homeowners for any cyber coverage endorsements and what limits are available.
2. Coordinate with any business cyber policies if working from home.
3. Understand what is and isn’t covered.
   

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3. Nuclear Verdicts and Liability Crisis

Nuclear verdicts—jury awards exceeding $10 million—have escalated dramatically. Analysis of 1,288 verdicts from 2013-2022 reveals median awards reaching $23.8 million in 2023 (up from $21.1 million), with mega verdicts ($100M+) increasing 400% since 2013[14].

Florida leads with 0.939 verdicts per 100,000 people—50% higher than New York. California, Florida, New York, and Texas produce half of all national nuclear verdicts[15]. State courts host 90% of verdicts versus only 10% in federal courts.

Critically, noneconomic damages (pain and suffering) drive verdict severity. In seven of ten years, noneconomic damages exceeded punitive damages, demonstrating susceptibility to psychological manipulation including “reptile theory” tactics, anchoring (suggesting arbitrary amounts that double to quadruple awards), and $1 billion in annual lawsuit advertising normalizing extreme awards[16][17][18].

Impacts on Private Clients

A 2025 Georgia jury awarded $4.2 million for a dog attack—far exceeding typical homeowners policy sub-limits of $100,000-500,000[19].

Making sure you have an appropriate umbrella limit is paramount. This limit of coverage is meant to be a moving target that is adjusted as your lifestyle evolves. Have a conversation with your advisor to discuss any significant changes in your net worth and/or public profile. Higher limits are available and we’re here to help.

4. Intergenerational Wealth Transfer Challenges

Baby boomers control $19.7 trillion in real estate, with the boomer population projected to decline 23% by 2035 and another 47% by 2045—transferring enormous holdings to millennial and Gen X heirs[21][22]. However, nearly 40% have lived in current homes 20+ years, with 68% in homes at least 30 years old[23]. Deferred maintenance—aging roofs, HVAC systems, electrical, and plumbing—often requires $50,000-$200,000+ in immediate upgrades inheritors lack funds to complete.

Insurance Complications

When aging parents move to assisted living, standard homeowners policies limit vacant property coverage to 30-60 days, requiring vacant home endorsements (30-50% higher premiums), regular inspections, winterization, and security monitoring. Failure to maintain proper coverage results in claim denials for theft, vandalism, or weather damage.

Post-inheritance, carriers increasingly restrict coverage on older homes through roof age limitations (declining roofs over 15-20 years), four-point inspections, wind mitigation requirements, and wiring restrictions. Inheritors may discover properties uninsurable without significant investment.

Multiple heirs create additional complications: disagreement on disposition, unequal contribution ability, mortgage difficulties, and liability exposure when one heir is judgment-proof while another has assets.

Many boomers retired to Sunbelt locations—Florida, California, Texas, Louisiana, Arizona—now facing acute climate risks. Millennial inheritors discover properties in locations they don’t want with deteriorating insurance availability. [26].

Avoiding Underinsurance (and Overinsurance)

• Choose carriers that use in home appraisals, apply annual inflation guards, and offer guaranteed or extended replacement cost. These protections help maintain proper insurance to value.
• If you haven’t appraised your fine art, jewelry, or collectibles in 3–5 years, schedule an updated review. Rising precious metal values mean some items may now be underinsured, while others may not require as much coverage and should be reduced which would provide a premium savings.

Asset Transfer Guidance

• Speak with your advisor before transferring assets to ensure proper risk management and insurance planning.
• Advisors can help prepare the next generation with education, loss prevention strategies, and insurance guidance.
• Homes: Discuss improvements that enhance home resiliency and insurability.
• Jewelry, fine art, wine/spirits: Review loss likelihood and proper insurance and risk management approaches.
• Middle market carriers often won’t insure high value items, or, in some cases, charge more for inadequate coverage.
• Asset transfers often indicate that the next generation needs a more sophisticated, high net worth insurance program.
• Working with a private client insurance advisor ensures proper coverage, carrier selection, and expert guidance.
  

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2026 Market Outlook

The private client insurance landscape of 2026 is characterized by converging mega-trends which interact and compound and the need to adjust accordingly is evident.
Property insurance faces continued volatility with national average increases projected 8-12% for homeowners, and 15-25% on average in catastrophe-prone states (FL, CA, TX, LA).

Percentage-based wind/hail deductibles expand beyond coastal zones, roof age limitations tighten to 15-year maximums, and carriers reduce willingness to write vacant or secondary homes. However, reinsurance rates declined 6.6% at January 2025 renewals, bringing modest relief.

Personal cyber policies are becoming a standard need for all clients, with limits increasing in response to the increasing risk.

Umbrella/excess liability premium increases moderate to 5-10% in 2026 after prior 15-30% spikes. There is additional underwriting scrutiny on driver records, property maintenance, dog breeds, and water features.

Conclusion

As the private client insurance environment undergoes rapid and profound change, high net worth individuals face a level of complexity and exposure unlike any previous era.

Climate driven property volatility, surging cyber threats, escalating liability awards, and the massive transfer of aging assets across generations are reshaping both risk and insurability.

In this landscape, protection gaps widen quickly, traditional carriers offer fewer solutions, and the costs of inaction grow exponentially. The path forward requires proactive planning—strengthening property resiliency, modernizing cyber defenses, securing adequate liability protection, and preparing heirs with the right education and insurance structures.

By partnering with skilled private client advisors and adopting a coordinated risk management strategy, families can safeguard wealth, maintain insurability, and navigate the evolving challenges of 2026 and beyond with confidence.

We invite you to reach out with any questions as we’re here to provide recommendations, information and guidance.

Interested in learning more? Check out our Insights page for other relevant education topics.

References

[1] Redfin analysis (2025). Baby boomer real estate holdings. Business Insider.
[2] National Association of Insurance Commissioners. (2025). Natural Catastrophe Risk Dashboard Report, December 31, 2024.
[3] National Centers for Environmental Information (NCEI). (2025). Assessing the U.S. Temperature and Precipitation Analysis in 2025. NOAA.
[4] NOAA Climate.gov. (2025). Sea level change data. National Oceanic and Atmospheric Administration.
Climate Change: Global Sea Level | NOAA Climate.gov
Monthly Climate Reports | Drought Report | December 2025 | National Centers for Environmental Information (NCEI)
[5] National Association of Insurance Commissioners. (2025). Homeowners loss ratio and P&C combined ratio data. Natural Catastrophe Risk Dashboard Report. Natural Catastrophe Risk Dashboard Report.pdf
[6] Khalil, M. (2025, December 3). Cyber Insurance Statistics 2025: Key Trends & Data. DeepStrike. https://deepstrike.io/blog/cyber-insurance-statistics-2025
[7] Khalil, M. (2025). Ransomware involvement in data breaches. Cyber Insurance Statistics 2025. DeepStrike.
[8] Khalil, M. (2025). Ransom demand and payment dynamics. Cyber Insurance Statistics 2025. DeepStrike.
[9] Khalil, M. (2025). Deepfake fraud statistics. Cyber Insurance Statistics 2025. DeepStrike.
[10] Khalil, M. (2025). AI-enhanced phishing success rates. Cyber Insurance Statistics 2025. DeepStrike.
[11] Khalil, M. (2025). Business email compromise claim statistics. Cyber Insurance Statistics 2025. DeepStrike.
[12] IBM Security. (2025). Cost of a Data Breach Report 2025. Cited in DeepStrike Cyber Insurance Statistics 2025.
[13] IBM Security. (2025). AI and automation impact on breach costs. Cost of a Data Breach Report 2025.
[14] Silverman, C., & Appel, C. E. (2024, May). Nuclear Verdicts: An Update on Trends, Causes, and Solutions. U.S. Chamber of Commerce Institute for Legal Reform.
[15] Silverman, C., & Appel, C. E. (2024). Top states for nuclear verdicts analysis. Nuclear Verdicts Report. Institute for Legal Reform.
[16] Silverman, C., & Appel, C. E. (2024). Economic vs. noneconomic damage composition. Nuclear Verdicts Report. Institute for Legal Reform.
[17] Silverman, C., & Appel, C. E. (2024). Anchoring tactics driving nuclear verdicts. Nuclear Verdicts Report. Institute for Legal Reform.
[18] Silverman, C., & Appel, C. E. (2024). Lawsuit advertising impact on verdicts. Nuclear Verdicts Report. Institute for Legal Reform.
[19] PropertyCasualty360. (2025, April 16). Georgia jury awards elderly woman $4.2M for dog attack. https://www.propertycasualty360.com/2025/04/16/georgia-jury-awards-elderly-woman-42m-for-dog-attack/
[20] TransRe. (2024). Medical malpractice verdict analysis. Cited in Institute for Legal Reform Nuclear Verdicts Report.
[21] National Association of Realtors. (2024). Baby boomer real estate ownership analysis. Business Insider.
[22] Harvard Joint Center for Housing Studies. (2024). Baby boomer population decline projections 2025-2045. Business Insider.
[23] Leaf Home & Morning Consult. (2024). Survey of 1,000 baby boomers on home age and maintenance. Business Insider.
[24] Metz, J. (2025). California property tax implications of inheritance. Senior Homeowner Solutions. Business Insider.
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[26] Fairweather, D. (2025). Chief Economist commentary on inherited property challenges. Redfin. Business Insider. Boomers are leaving their millennial Children with a huge headache — James Morris Homes
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Why successful and high net worth individuals and families deserve more than a 1-800 number.

You’re busy. You juggle multiple calendars. You run a business (or two). You travel (a lot). You have a booked schedule with patients in your waiting room.

You have your wealth manager, estate planning attorney, and/or your accountant all in your contact list and know them on a first name basis so you can get quick and to-the-point answers. Shouldn’t your risk management and insurance team be the same?

You deserve an insurance advisor you can actually call.
Request a confidential consultation with a Simpson | McCrady advisor to discuss your current coverage and risk exposures.

Click Here and Request a Consultation

In an evolving agent and advisory landscape, it is becoming more frequent that we have someone come to us describing their previous agency experience with a degradation of service over the years or, in some cases, a complete lack thereof. They’re given a 1-800 number to make policy changes or to call when something goes wrong and they need to file a claim. The agent can’t provide the increased liability limits that they need to protect their net worth or identity and cyber options to protect against an attack. They can’t help with the new secondary home out of state, high end vehicles, growing fine art collection, or provide proper guidance on the increased risks of an in ground pool, in home domestic staff, snow mobiles, ATVs or high performance watercrafts. They lack the sophistication to handle complex risks.

“I don’t even know who my agent is.” This is a phrase we hear more often than not when we speak to someone looking for a change and looking for a better experience.

If your current insurance experience feels impersonal or transactional, it may be time for a different approach.

Schedule a Private a Consultation

We are a boutique firm that specializes in helping successful families and individuals prepare for the “what if’s” in life. We help during stressful times when something goes wrong and guidance or a helping hand is needed. We are a fiercely independent agency that benefits from being small and nimble to pivot and adapt to our client’s needs as they evolve. There is no 1-800 number with us.

At Simpson | McCrady, every client works directly with a dedicated advisory team — not a call center.

Speak with a Trusted Advisor

We represent multiple high net worth and affluent insurance companies so our clients know that they’re getting what’s best for their unique situation and a risk management plan to buffer them from what can be avoided or mitigated up front.

Every client that we serve has a dedicated team in house. We assist with the day to day things like purchasing or selling a vehicle, a new piece of jewelry or piece of artwork. We also assist with more complex discussions like a significant fire loss or automobile accident, artwork or collector vehicles in transit internationally, the purchase of a secondary home in a different state or a significant home renovation. We also address the different risk management discussions that should take place around these topics, the excitement (and anxiety) about a daughter or son getting their driver’s license or heading off to college and what the parents can do to protect them, the unfortunate event of a divorce, or a death in the family and assets that are being transferred to the next generation.

Complex lives require thoughtful risk planning.

Request a Risk & Coverage Review

Our team members are constantly seeking ways to better equip themselves for these evolving conversations with continuing education and earning additional specialty designations. We have numerous team members holding designations for CISR, CIC, CPRIA and CAPI, to name a few, and the list is still growing. Our office is also a proud member of the Private Risk Management Association (PRMA) which is recognized as the forum and voice of the high net-worth private risk and insurance management niche.

If your current insurance relationship feels impersonal — or you’re unsure whether your coverage truly reflects your lifestyle and assets — our advisors are here to help.

If you believe you need a step up from the norm, reach out to discuss our process and how we help clients protect tomorrow, today.

Request a Private Consultation,

call us directly at 412-261-2222, or email us at info@simpson-mccrady.com.

For more resources and information about Simpson | McCrady, check out our Facebook and LinkedIn pages.

Ligonier Ice Fest 2026 was a success!

Simpson & McCrady was honored to be a sponsor, and one of our very own carved a sculpture for the event. We look forward to this event every year and can’t wait to see the spectacular creations next year!

The annual Bring Your Child to Work Day at Simpson & McCrady was on Thursday, June 5 and it was heartwarming and lively occasion—one that fills the office with cheerful chatter, toys, games, and even a plastic golf club and ball or two. Our young guests arrived with wide eyes and big smiles, eager to see where their parents spend their days.

The day kicked off with a sweet start—donuts! Each child received their own employee badge and completed fun “new hire” paperwork, which included questions like “What do you want to be when you grow up?” One awe inspiring answer: Belle from Beauty and the Beast.

A tour of the office followed, giving children—ranging in age from almost 2 to 17—a chance to meet every team member. The break area, with the special coffee and hot cocoa maker was a highlight (we may have run out of hot cocoa), and the excitement continued with a delicious Chick-fil-A lunch that everyone enjoyed together.

Throughout the day, the children got a firsthand glimpse into the world of insurance. For many, it was a day of “firsts”—first time in an office, first paycheck (yes, every child received one!), the first introduction to the insurance industry, and even their first time painting a rock.  We even played bingo.

More than anything, the day was about spending time together, for children to see their parents in action, and for all of us to share a little bit of what makes Simpson & McCrady such a special place. From engaging activities and creative crafts to lots of laughter and running around, it was a blend of learning, fun, and togetherness so thank you for bringing in your children for they are awe inspiring.

And thank you to everyone who helped make this tradition such a wonderful success. A special shout out to Kathy Lafon, Lauren Newlin, and Samantha Palumbo and to the Company for making this a special day. We’re already looking forward to and planning another unforgettable Bring Your Child to Work Day next year!