No matter how carefully you look after your rental property, you can’t watch over it 24/7 and accidents happen. If a tenant trips on a broken step and falls badly or a guest of the tenant slips on cracked tile, they can place the blame on a defect or lack of maintenance in your rental property and take you to court.
Rest assured – landlord liability insurance can protect you from injury or damage claims associated to your rental property. It protects landlords from compensation claims by a third party such as a tenant, their guests, a visitor or a tradesperson.
What is public landlord liability insurance?
Landlord liability insurance is a form of public liability insurance, designed to protect landlords from compensation claims.
If someone is injured or their possessions are damaged and they blame a fault in your rental property, your landlord liability insurance policy could pay the compensation costs and legal fees, up to the limit stated your policy.
Compensation pay-outs can increase at a rapid rate when medical costs and lost income is taken into consideration, so it is important to have a valid insurance policy.
Do landlords need public liability insurance?
Public liability insurance is included as standard in many landlord insurance policies. The majority of landlords will decide to take out this insurance, but the decision is ultimately yours. The three main reasons as to why landlords may need this public liability insurance are:
- For financial protection in the event of an injured tenant or visitor — even if you keep your property in immaculate condition, just one loose floorboard or an upturned nail could result in high compensation costs.
- To protect against costs of damage to possessions — if a fault in your property, such as a leaky pipe, leads to the damage of a possession, the costs to replace can be extremely high. From large TV’s to iPhones and tablets, damage to these common products can quickly rack up bills.
- To ensure the satisfaction of tenants — in the unfortunate event that legal fees and compensation are needed, public liability insurance ensures that you are able to give your tenants the money they deserve. This can help to maintain good relationships and prevent any disagreements.
How much liability insurance should a landlord have?
Compensation claims can be very high and your level of cover is the maximum amount that your insurer will pay out for a claim, so most insurers offer cover in the millions.
Due to individual local authority specifications, commercial landlords may be required to have a particular type of landlord liability cover and they will specify what level is needed.
Public liability for landlords differs from employers’ liability insurance, which provides protection in the event of injury to anyone you’ve hired to work in relation to your property like a gardener, builder, plumber or cleaner.
What could happen without landlord liability insurance?
If you didn’t have a valid landlord liability insurance policy, you would have to pay for your own defence, any damages awarded and potentially the claimant’s legal costs too. The claim will then add on any loss of earnings or ongoing care required by the claimant.
By taking out public liability insurance as a landlord, you could claim on your insurance to cover these costs, which could well run into millions.
Do I need landlord liability insurance if I’m renting to family?
Although it’s not a legal requirement, it is advisable to take out landlord liability insurance if you are renting to family. While it’s unlikely that a family member will take you to court, their guests may bring legal action against you if they’re injured at your property – you can never be sure.
Often landlords who are letting to family or friends think that their standard home insurance will cover the building and contents, however this is not the case if they are not the resident.
Do I need landlord liability insurance if I rent out a flat?
Yes, you do need landlord liability insurance for a flat, but the type of policy required is dependent on whether you own the leasehold or freehold. The policy may also provide cover for communal areas that are your responsibility.
If you have a leasehold for a flat, it is usually the case that the freeholder will have the building insured. However, this does not necessarily mean that your particular flat is covered, so it is worth making sure that the chosen policy covers your own specific areas.