LANDLORD PUBLIC LIABILITY INSURANCE: Buyers Guide

When it comes to rental properties, the landlord is solely responsible for providing enough public liability insurance, which also includes the tenant. There’s no getting around it. Accidents (and events) can and do happen, despite the best intentions. As a result, it’s critical for landlords to have enough insurance before putting their property on the rental market.

What is landlord liability insurance?

Landlord liability insurance protects you from injury or property damage claims arising from your leased property. If a guest tripped on a loose piece of flooring, for example, your landlord’s liability insurance would cover the compensation and legal costs.

Landlord liability insurance is a sort of public liability insurance that protects landlords from compensation claims from third parties such as tenants, visitors, and tradespeople.

If someone accuses your rental property, your landlord liability insurance may cover the costs of compensation and legal fees, up to the policy level.

Compensation settlements can be very large because they take into consideration things like medical expenditures and lost income.

Prevention is better than cure

A landlord’s best line of action is to avoid insurance claims and disputes at all costs. Tenants have the right to dwell in a place that is safe, clean, and well-maintained. They also have the right to have flaws repaired as soon as possible after they are reported. When a landlord ignores their obligations and fails to fulfil their duty of care to their tenants, the consequences can be disastrous.

In 2013, a Melbourne man received $300,000 in public responsibility compensation after sustaining serious injuries when the balcony balustrade of his rented apartment fell. The tenant filed a lawsuit against the landlord, and it was discovered that the balcony had not been properly maintained or inspected on a regular basis.

‘The landlord had been told by prior tenants that the balcony timber was rotting. But the landlord failed to guarantee that it was suitably restored,’ according to the tenant’s insurance lawyer.

The case for insurance

Landlords/property investors must acquire landlord and tenant insurance in light of public liability issues like these. A landlord can be confident that they are covered for public liability, damage to buildings and goods, rental defaults, and damage caused by tenants for a few hundred dollars each year. If peace of mind isn’t enough, landlord insurance is tax-deductible against investment income.

Read the fine print

Because not all landlord protection programmes are the same, it’s critical to read the fine print. When it comes to insurance, the most important thing to remember is to make sure you have enough coverage for the dangers you encounter. It’s possible that you’ll be

• Natural disasters such as storms (including lightning strikes), fire, floods, earthquakes, and tsunamis
• Building cover to protect yourself from incidents involving structural aspects of your property, such as gas and plumbing systems, fixed appliances (gas or electric), pipes and cables, fixtures and fittings, awnings, and other external structures such as roofs, staircases, and balconies.
• Accidental damage caused by tenants, theft, malicious damage, and loss of rent due to tenants leaving without paying.

Injury to tenants and third parties

Landlord insurance typically includes public liability insurance, also known as legal liability insurance, and tenant liability insurance. Which covers the landlord in the event of death or physical injury to others as well as damage to their property. For instance, public liability insurance will protect the landlord in the following situations:

• a piece of old carpet comes loose and the tenant or visitor slips and falls and injures themselves
• the timber of the stairs, balustrade, balcony, or decking rots and the structure collapses, causing injury or death
• An old gas heater leaks, causing carbon monoxide buildup and potential poisoning or even death.

Generally, public liability insurance covers up to $20 million for the landlord’s legal liability for an incident at their rental property. If the tenant makes a claim against the landlord, they are legally liable. Public liability insurance will cover the landlord for:

• Damages awarded to the claimant
• The landlord’s legal costs in defending the claim
• The claimant’s legal costs, if the landlord is at fault.

Without public liability insurance, the landlord could be in for a very expensive time.

So, if you’re a landlord thinking about taking out insurance for your rental property. The advice is simple: don’t think, do.

Do landlords need public liability insurance?

It’s up to you whether or not you need public liability insurance. Although many landlord insurance packages offer it as a basic feature, many landlords decide they do.

Accidents do happen, no matter how hard you try to keep your rental property in good shape. This is where landlord liability insurance comes in.

Remember that even the simplest things can create accidents, such as an out-of-place tile or a trailing cable, and that these mishaps might be on you as the landlord.

How much liability insurance should a landlord have?

Consider the cost of compensation claims when determining how much landlord liability insurance you should purchase. Your coverage level is the maximum your insurer will pay in the event of a claim.

The majority of insurers provide coverage in the millions of dollars. Simply Business offers landlord liability insurance in amounts ranging from £2 million to £5 million, depending on your requirements.

Commercial landlords may be required to obtain a certain level of landlord liability insurance. For example, due to local government requirements.

What is property owners’ liability insurance?

Your landlord’s insurance policy will normally contain property owners’ liability insurance. Which will cover you if a tenant or visitor is on (or as a result of) your property. This is simply landlords’ public liability insurance.

For example, if a loose tile falls off the roof and hits your renter or a passerby, you may be liable for damages, and resolving the situation might be costly. This danger can be by liability insurance.

It is your job as a landlord to ensure that your property is as safe as possible. As a result, property owners’ liability insurance protects you from fees and expenses related to:

• Bodily injury by accident, including death, disease or illness
• Accidental damage to property happening during the period of insurance and arising from ownership of your property, but not its occupation

With Endsleigh’s residential landlord insurance, property owners’ liability cover is provided up to £5,000,000.

What is landlord employers’ liability insurance?

The employers’ liability protection component of your landlord insurance policy will cover the landlord’s liabilities for any employees they hire. It is only for those who are directed by the policyholder, such as if you run a management firm.

The landlord’s employers’ liability insurance will not cover a contractor hired by the landlord to perform maintenance repairs; the contractor’s company will have its own liability insurance in place for its employees.

What is landlord occupiers’ liability insurance?

If you have landlord contents insurance with Endsleigh, you are responsible. As an occupant of the property, up to £2,000,000. If you live in the property, such as if you have a live-in tenant, you will only need this coverage. Landlord and tenant occupiers’ liability allows you to cover any costs and damages awarded to a member of the public for unintentional death, bodily injury, disease or illness, or damage to the property that occurred during the insurance period and arose from the property’s ownership. The NHS will be reimbursed for hospital care and ambulance costs.

What is landlord contents insurance?

Landlords’ contents in common areas of a building are frequently covered by landlord insurance. When properties are rented furnished, however, coverage is not automatically included, and you should inform your insurance advisor so that coverage may be adjusted to your needs.

This sort of insurance is designed to cover the loss or damage to a landlord’s belongings as a result of a variety of insurance risks such as fire, water damage, and theft, and it applies to any objects belonging to the landlord on the premises.

Unintentional damage may be covered by some insurance, but not all will cover accidental loss or damage caused by tenants. It is critical that you determine the type of coverage you require.

What does landlord contents insurance cover?

Tipping your house the wrong way up would be a terrific approach to comprehending the difference between your ‘contents’ and your ‘building.’ The contents include everything that might fall. This means that the walls, ceiling, sanitary ware, and fitted kitchen/bedroom cabinets are covered by the landlord’s contents insurance, but the walls, ceiling, sanitary ware, and fitted kitchen/bedroom cabinets are protected by the building insurance.

When renting a furnished property, this becomes important, and many policies offer standard coverage. Make sure you know what this level is and decide if you need to increase the amount to reflect replacement prices.

#1. Buildings insurance

You must ensure your property covers the cost of rebuilding at today’s rates; this is one of the most critical aspects of property protection and must be correct. It exists to pay the costs of damage repair, as well as the price of rebuilding, if necessary. Assume the building is destroyed by fire or a violent storm, rendering the property uninhabitable.

You should ensure your home covers the full cost of rebuilding it. Being underinsured (i.e., telling your insurance company that the cost to rebuild your home is less than it actually is) puts you at risk of having to pay the difference, as explained in the condition of the average clause discussed below. Trying to save a few pounds on your insurance may end up making it unnecessary to have in the first place.

#2. Subsidence insurance

If your property has experienced subsidence, which is the downward movement of the structure or the ground that supports it. You must declare it during the quotation process. It is critical that you do so, otherwise, you face extra issues due to uninsured subsidence.

You will need to provide proof that the issue has been addressed by a professional, and although it will most likely raise your premium, a specialist insurer should not have a problem sourcing you a policy that provides adequate cover based on a case-by-case consideration.

#3. Accidental damage cover

Accidental damage insurance protects you against damage to your property or belongings. As well as the expense of repair or replacement, caused by you, your tenants, or a visitor.

This isn’t often included as standard, so specify that you want accidental damage coverage when you get your price.

If you currently have landlord’s insurance, review the wording to see if the coverage is by default or if you need to add it.

FAQs