Originally Posted by benjamin

What you should understand is that you aren't going to be sued personally. One way to handle this is to file a claim against your auto insurance company or your umbrella insurance (you're a homeowner, aren't you?). If the insurance company fails to adequately compensate the kid's parents, they'll be able to sue the insurance company. You personally shouldn't be sued. If your wife's family thinks they want to sue you personally, they're stupid assholes.

(Note: I am not a lawyer, or a law student, or a paralegal, etc.)