It is a terrible falsehood when people think that it doesn’t cost the homeowner anything when they are sued because they have the insurance to cover it and the insurance company pays and it doesn’t come out of their pocket. Whenever a company has to pay out a claim they always find a way to get their money back. They usually raise the client’s premium, they might throw them out and cause them to take other insurance which might cost them more since every company does their research to see if there were claims paid out on that client, and general it causes them a lot complications with the insurance company, investigations etc and ill feelings.
Why was your child there. Were they doing you a favor by watching her? Were they negligent in any way? Did they child do it to her? Did they do it to her? Did they have something on their property that should not have been there? Or was it plain and simple an accident that could have happened on your own property?
As far as “many possum” are concerned, what does your own Rav say about suing your own neighbor? How would you feel if their daughter was playing at your home and she was the one that got hurt and they decided to sue you. Would that be OK with you and your husband? Would you still be friends?