Do You Really Need Public Liability Insurance as a Landlord?

Are you a landlord wondering if public liability insurance is necessary for your rental property? Many landlords are confused about the difference between public liability insurance and their general or umbrella coverage.

While it may seem like just another type of insurance to add to your already growing list, public liability coverage can protect you from certain kinds of lawsuits and damages that fall outside of your general policy coverage. 

It's important to understand the risks associated with renting out properties and make sure that you have the appropriate coverage in place.

What Is Public Liability Insurance?

Public liability insurance protects you against liability lawsuits from third parties who might have suffered or claim to have suffered due to your business operations. As a landlord, these lawsuits could be from your tenants, their guests, and trade or service people. 

In addition, it may also cover you from liability claims by intruders who might be injured while trespassing on your property.

How to Decide if Public Liability Insurance Is Right For Your Rental Property

Landlords sometimes wonder if public liability insurance is really necessary. Here are some rules of thumb to follow to help you decide if it's worth it for you.

First, think about the potential risks associated with your property. Do you have a pool or other potentially hazardous amenities? Are there a lot of visitors coming onto the property, such as contractors or maintenance workers? Is the pavement around your property in good condition? Are there any potential tripping hazards? These are all factors that might make public liability insurance necessary.

Another question to ask yourself is what kind of coverage you currently have. If your general property insurance doesn't include public liability, adding it on could provide some extra peace of mind.

What Public Liability Insurance Covers (and Doesn’t)

The number of events that can result in a liability claim is seemingly endless. Consider someone tripping and falling on your property as an example. This might lead to minor wounds, or it may be as serious as a fatal fall. Some of the most commonly covered events include:  

Property damage

If you failed to maintain the property and there were leaks, falling trees, or a faulty gate that damaged your tenant's or another party's property, you could be liable for this loss. Your public liability coverage steps in and compensates them for this loss.

Physical injuries

These are any bodily harm a third party incurs on your property. For example, an open staircase or faulty handrail could lead to a slip or a fall. Such a fall could lead to fractures and other physical injuries. Your policy will cater to their medical costs if sued and found liable for negligence.

Lost income

If an injured party sues for lost revenue due to physical injuries and you are liable, your public liability coverage will compensate them up to your policy limits.

Accidental death

If someone dies on your property and you are held liable, your public insurance policy will generally cover the claims.

Legal fees

We live in a litigious society, and lawsuits can be expensive, even for minor events. In such cases, your public liability insurance covers your legal fees. If you lose the lawsuit, you could also be liable for the other party's legal fees. With the right public liability policy, you don't need to worry about these costs.

There are a few situations where public liability for real estate insurance won't help you if you're sued by a tenant or member of the public. For example, this type of insurance generally doesn't cover intentional acts or damages caused by gross negligence. So, if you were to harm someone intentionally or if someone was injured due to your complete disregard for their safety, your public liability for real estate policy probably wouldn't help you foot the bill. 

Additionally, most policies exclude coverage for things like professional services, environmental damages, and contractual liabilities. So, if you were to provide professional advice or services to tenants and something went wrong, your policy likely wouldn't cover the resulting damages. The same goes for any environmental damages caused by your property (think: lead paint exposure) or any contractual liabilities arising from agreements between you and your tenants. 

These are just a few examples. Be sure to read your policy carefully so that you know what is and isn't covered before making any assumptions about what protection you have in the event of a lawsuit. 

Why Public Liability Insurance Is a Must for Landlords

There are several reasons why landlords need public liability insurance:

• Accidents happen and there's always a chance that someone could be injured on your property. If this happens and you're sued, public liability insurance can help cover the cost of legal fees.
• Even if you're not sued, medical bills and other expenses can quickly add up if someone is injured on your property. Public liability insurance can help reimburse you for these costs.
• If your property causes damage to someone else's property, you could be held liable. For example, if a tenant's apartment floods and damages the unit below it, the landlord could be held liable for the damage. Public liability insurance can help reimburse you for the cost of repairs in this type of situation. 

10 Questions To Ask Before Buying Public Liability Insurance for Your Rental Property

1. How much coverage is offered? Make sure you understand the maximum amount the insurance company will pay out in the event of a claim.

2. Who is covered under this policy? Is it just you as the landlord, or do tenants and visitors also have coverage?

3. What specific incidents are covered? Are there any exclusion clauses that could leave you unprotected in certain situations?

4. Are there restrictions on the type of property or location that can be covered?

5. What claims involving maintenance and repairs are covered? Do routine maintenance and inspection, or only unexpected accidents or damage, fall under the policy?

6. Is there coverage for loss of income due to property damage, such as if a tenant needs to temporarily relocate during repairs?

7. How long does the coverage last—is it a one-time purchase, or do you need to renew yearly?

8. Are there any discounts available, such as for bundling with other insurance policies or having a claims-free history?

9. Can additional coverage be added at a later date if necessary?

10. What is the claims process like—how quickly can reimbursements or repairs be made in the event of an incident?

Asking these questions before purchasing a policy can ensure you have the right level of protection for your rental property and potential liabilities. It's always better to be prepared ahead of time rather than face unexpected gaps in coverage after an incident occurs. For a deeper explanation on why questions like these are important, check out our Ultimate Questionnaire for Landlord Insurance Providers.

How To Choose The Right Public Liability Insurance for Your Needs

Finding the right public liability insurance policy can feel overwhelming, but there are a few key things to keep in mind. First, ensure the policy covers any potential risks that could arise from your property—including physical damage and injury to tenants or visitors.

Next, take a look at the coverage limit. Make sure it's high enough to cover any major accidents or incidents without leaving you with out-of-pocket expenses. 

Additionally, pay attention to the exclusions listed in the policy—while they vary by insurer, common exclusions can include intentional damage or criminal activity. It may also be worth looking into extra coverage options, such as legal expenses if you were to face a lawsuit.

Researching different insurers and comparing quotes can also help ensure you get the best value for your needs. By taking these steps, you can feel confident in finding the right public liability insurance for your rental property.

Where to Find Public Liability Insurance

As a landlord, it's important to protect yourself and your property with public liability insurance. You can try searching for a policy through traditional means, such as speaking with an insurance agent or calling various companies for quotes. However, using an online insurance broker like Obie may be the best option.

Obie uses state-of-the-art technology to revolutionize the insurance buying process and make it as quick and easy as possible. Plus, they have access to a wide range of policies from top providers, allowing you to compare and choose the best coverage for your needs. More than $4 billion in property is insured with Obie and coverage is available in all 50 states.

Don't waste valuable time and energy searching for policies on your own—go with a trusted online broker like Obie for all your insurance needs. Receive an instant quote online by simply entering your property address here.