What Does Landlord Liability Insurance Cover?

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Property owners in the business of renting out homes or property to tenants will need to be aware of the risks involved. Along with tenants defaulting on rent payments or causing property damage, several other issues can end up costing the landlord money.

For example, there are instances where a tenant can make a claim or sue the landlord for loss or damages, and without the correct insurance in place, the landlord could be responsible for paying a large financial settlement. For this reason, landlords invest in coverage known as landlord public liability insurance (also known as landlord liability insurance) to protect themselves from any unexpected negligence claims.

These claims can be brought not just by the tenant of the property, but should any visitor sustain an injury that is deemed to be the fault of the landlord, and they will be able to seek compensation through the legal system. Landlord liability insurance will provide protection and shield the building owner against an array of claims for things such as:

  • Bodily Injury
  • Loss or damage to property
  • Wrongful eviction
  • Trespass
  • Interference with right of way
  • Invasion of the right of privacy

In addition to protecting landlords from expensive settlement payments, this type of insurance will cover legal expenses, including the cost of appearing in court, while guarding against safety legislation and data protection problems. Given the difficulties involved when landlords and tenants run into disputes, having adequate liability protection in place is a sensible option.

Can a landlord get public liability insurance?

Being in the business of renting property, whether privately or commercially, can carry several inherent risks and pitfalls. For these reasons, a landlord’s insurance policy can incorporate several different policies in one package to provide adequate protection.

These can protect against issues like:

  • Buildings cover (Fire, flood damage etc.)
  • Landlords content insurance (Upgraded fittings, fixtures, white good, flooring)
  • Accidental or malicious damage cover
  • Rental Income Protection

For landlords and owners who want to shield their assets, public liability insurance can cover the cost of any third-party damage or injury claims and associated expenses. For any claims that are due to loss, damage, or injury including death, a public liability policy will ensure that the property owner is not personally responsible.

As there is a reasonable risk of tenants or visitors suffering an accident or injury while living in or visiting a rented property, landlord’s liability insurance (a form of property owners’ liability insurance) offers the same protection to landlords against claims brought by a third party. Typically, the majority of landlords’ insurance policies will contain some type of liability coverage.

According to NimbleFins, landlords’ public liability insurance limits often fall between £2 million and £5 million, but limits can be higher depending on the level of coverage needed. Value of the property, assets and other factors will need to be considered to determine the appropriate policy coverage level. It may be best to seek professional guidance to ensure the correct amounts are set.

Premiums are relatively reasonable, with the average landlords’ liability policy costing in the region £55 a year. However, it should be noted that this will protect the landlord from liability claims only; other required policies that are added will increase the level of protection and the monthly payment.

The landlord’s content insurance protects only the fixtures, fittings, materials, and non-built-in appliances owned by the landlord for items in the property. It will not cover any of the tenant’s belongings in the case of theft or similar losses. Tenants will need to obtain their own contents insurance to cover their personal property and pay for the cost of repair or replacement.

Do I need landlord liability insurance?

Rental property is currently in high demand in the UK, partly driven by ‘Generation Rent’, the young adults that are driven out of the homebuying market by high prices. For landlords, this can mean a reasonably frequent turnover of property as tenants move on and are replaced by new occupants.

While this can mean less risk of homes standing empty, an increased number of tenants can also mean higher exposure to potential claims from accidents or injury. Increasing the risk of potential lawsuits and legal actions brought against the landlord or building owner. Even with this heightened possibility of claims, landlords have no legal requirement to obtain liability insurance.

The law does not insist that landlords purchase liability protection, but it makes sound business sense for those that rent and lease property. There can be a higher risk of legal action for those landlords that rent multiple properties, but whether one or several buildings are owned it is important to have the proper insurance. Having adequate protection in place will limit the expense and financial obligation associated with successful claims and protect the landlord’s personal finances and assets.

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