Do I need to get homeowners insurance liability coverage?

Public liability insurance cover safeguards you and your family members from legal liability if someone – your friend, your neighbour, or a visitor – gets hurt on your property. These policies typically automatically include every member of your family that resides in the property being covered.

Legal liability home insurance cover may also protect you if you or a family member unintentionally injures someone else outside your home. Additionally, you and your family members may be protected against being held liable for loss or damage to someone else’s property.

Typical liability claims include:

• Injuries due to slips and falls in your home or elsewhere on your property.
• Falling trees or branches from your property damaging your neighbour’s garage, home or parked car.
• Dog bites.
• Damage if your dog were to get into someone else’s property and cause damage.

Some legal liability home insurance policies not only cover you for accidents that take place at your property, but also for accidents anywhere in Australia. For example, you could be away on holiday and playing tennis when a shot accidentally breaks your opponent’s nose, and your insurer may still cover you for any costs. Some policies even cover accidents in New Zealand or elsewhere in the world, as long as you reside in Australia.

Some insurers might also offer optional cover for domestic workers compensation, to cover accidents that might occur while you have people working for you on your property. However, this cover is only available in some states. Of course, many tradespeople and subcontractors have their own liability insurance, whether self-bought or through their employer. It may still be a good idea to consider this cover if your home is being renovated or repaired.

Most home and contents insurance policies in Australia include considerable legal liability cover, often in the range of $10 million to $20 million. This amount is dependent on your insurer and your policy, so check the Product Disclosure Statement (PDS).

This cover protects you against any financial expenses that arise from any illness, injury or death suffered on your property by somebody who doesn’t live there. It also covers any loss of or damage to their property.

While a home insurance policy that includes legal liability is typically quite comprehensive, there are still a few situations where legal liability may not cover you, such as:

• Damage to your own property
• Injury or property damage to any people who reside with you
• Liability while under a rental or lease agreement
• Claims that are from your business or trade

Each insurance company has a different view on inclusions and exclusions, and those depend on the policy. Always read the PDS of your chosen policy to ensure that you are fully aware of precisely what is covered.