As a homeowner, you have a responsibility to all those that live within it AND those you invite in. As a good host, you want to be sure that your guests are comfortable and well looked after. But being a good host goes beyond delicious food and a comfy place to sleep. As a homeowner, you have a responsibility to ensure that your guests are also safe. Accidents can create a stressful and costly situation for you and your family – that’s the whole point of having reliable home insurance coverage. Besides protecting your family and your belongings, your policy also includes personal liability coverage. In this article, we explain what personal liability insurance is, what it covers, and how much you should purchase to ensure you (and your guests) are looked after.
What is included in home insurance coverage?
Home insurance is what protects you, your family and your possessions from loss and liability. The home insurance policy that you buy determines what coverage you will receive in the event of a claim.
Your homeowners’ policy contains two sections:
Section I: Provides property coverages (A, B, C and D)
- Coverage A — Dwelling
- Coverage B — Other Structures
- Coverage C — Personal Property
- Coverage D — Loss of Use
Section II: Provides liability coverages (E and F)
- Coverage E — Personal Liability
This section of the homeowners’ policy will provide coverage in the event you or a resident of your household are legally responsible for injury to others. It provides a defence and will pay damages, as the insurance company deems appropriate. However, there are some exceptions.
- Coverage F – Medical Payments to Others
This coverage pays for reasonable medical expenses for persons accidentally injured on or in your property. Medical payments coverage does not apply to your injuries or injuries of those who reside in your household.
What is Personal Liability Coverage?
When you purchase any type of property insurance, whether it’s home insurance, condo or tenant insurance, personal liability coverage will be part of it. Should you or a household member be found responsible for causing bodily injury or property damage to someone else, your personal liability coverage protects you financially from expenses that result from a lawsuit. Litigation can be expensive, and paying lawyer’s fees, legal expenses and possible payouts can add up.
Here are some common examples of personal liability claims:
- Slips and falls in icy conditions on your property, both indoors and outside
- Tripping hazards, such as items left on the floor or floor coverings
- Injury to guests after serving them alcohol
- Animal bites
- Pool-related accidents
- A tree branch from your property breaks during a windstorm and damages your neighbour’s property
Without personal liability coverage, you can end up paying out of pocket for any of the scenarios listed above, and many others. You will be responsible to cover legal and/or medical costs, or to repair or replace damage you’ve caused to someone else’s property.
Consider a higher limit if you have a swimming pool, a playground set, or pets.
What does Personal Liability cover?
1. Bodily injury
Personal liability coverage typically covers claims related to bodily harm that is caused to someone on your property.
2. Property damage
Personal liability coverage on your home insurance protects you against lawsuits if you’ve caused damage to another person’s property, whether at home or away.
3. Medical fees
In an injury situation, the injured person might incur hefty out-of-pocket medical expenses due to the accident. When you are found partially or fully responsible for the accident causing them harm, personal liability insurance often pays the cost of any medical expenses.
4. Legal fees
If you end up having to go to court because of a claim, personal liability coverage often pays for the lawyer defending you in court. Additionally, your insurance provider may front the cost of any fines or payouts demanded by the court. Any fees and payouts will still be subject to your policy limit.
Own a cottage? Be sure you have adequate coverage for any liability claims. Learn more about cottage insurance here.
What is not covered by Personal Liability Insurance?
According to Travelers.com, your homeowners or renters’ insurance will cover certain personal liability claims. However, there are other claims that may not be covered. A few common examples include:
- Liability that results from a car accident. These claims should be covered by your car insurance.
- Bodily injury or property damage caused intentionally by you or a family member.
- Injuries or damages sustained by you or other covered residents in your home.
- Bodily injury or property damage arising out of any business conducted by you or your professional activities. Claims that arise while you are engaging in any business-related activities should be covered by a home-based business insurance policy.
Do you need liability personal insurance by law?
No, but it offers so much protection in the event that something happens on your property that it just makes sense.
Does liability cover medical expenses for you and your household, too?
Medical expenses for others may be covered by the “bodily injury” part of your liability coverage. However, it will not cover your own medical payments if you get hurt, nor for anyone else who lives with you. It only applies if you cause injury to someone else.
How much personal liability coverage do you need?
As we all know, despite our best efforts, accidents will happen at some point. To ensure that you do not have to pay out-of-pocket for damages or medical costs, you should have personal liability insurance coverage. As a rule of thumb, a $1 million limit is recommended – but $2 million or more is ideal. Most times, raising your limit won’t make your payments go up by too much. So, it’s well worth the few extra dollars a month. Legal fees, medical fees, and fines and payouts can quickly snowball, so be sure that you are covered.
Does personal liability cover home-based businesses or home daycares?
No. Most insurers don’t include coverage for home-based businesses or home-based daycares. Home-based business insurance can pay out for property damage, injuries related to the business (like a client who takes a fall in your office), employee injuries and lawsuits. Coverage is available as an extension of your home insurance because as long as your home serves as the main office of your business, you will qualify for this insurance.
Does liability coverage in home or tenant insurance provide coverage while driving?
No. Liability for injuries or damage to other peoples’ property while driving is not covered by your home or tenant insurance policy. You need to carry enough liability coverage on your car insurance policy to protect you in case of a driving-related mishap.
What if I don’t get sued, but I’m still responsible for an injury or damage to someone else’s stuff?
According to Economical.com, while it’s not technically “liability coverage,” your home insurance policy may include coverage for voluntary payment when you’re responsible for an injury or damage to someone else’s property but not being sued. For example, if you hit your neighbour in the teeth while teeing up to drive a golf ball, you can volunteer to cover his dental bills — and your insurance company can cover the costs.
If you want to know how much it will cost for personal liability insurance, do a quick quote online if your insurer offers online services. You can also get in touch with one of our isure brokers to find out about your personal liability options. Call us today and safeguard your peace of mind!