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Do I need to get homeowners insurance liability coverage?

Do I need to get homeowners insurance liability coverage?

Imagine this: You've got a great party going on at home, when suddenly, without any warning, a guest slips on the wet floor near the swimming pool and the fall results in a few broken bones. As you rush to help, the thought of you being held legally responsible probably doesn’t cross your mind. But unfortunately, you could potentially be found legally liable for your guest’s accidental injury while on your property.

Most Australians have home and contents insurance that protects their home and their belongings against unforeseen damages. With this insurance you can be sure that your home and possessions are all well-protected, but does it protect the people who visit?

Whether it’s a friend, a colleague or even a tradesperson, if someone gets injured or falls sick whilst on your property, you’re legally liable. As such, you could end up paying a considerable sum of money in personal damages. You cannot prevent an accident, but you can prevent yourself from incurring considerable costs in the event of an accident by being insured for legal liability.

Will home insurance public liability cover pay for personal injury?

Besides protecting your home and its contents, did you know that home insurance also offers another type of cover called legal liability home insurance? This an important but relatively unknown inclusion to home insurance policies worth investigating.

This insurance cover safeguards you and your family members from any legal liability if someone – your friend, your neighbour, or a visitor – gets hurt on your property. This cover also protects you if you or a family member injures someone else outside your home unintentionally. Additionally, with legal liability home insurance, you and your family members are protected against being liable for loss or damage to someone else’s property as well.

Typical liability claims include injuries due to slips and falls in your home or elsewhere on your property. If a tree or a branch from your property falls and causes damage to your neighbour’s garage, home or parked car, the policy covers you for this too.

Another fairly frequent home insurance public liability claim is dog bites. If your dog bites someone and you’re proven liable, the vet and medical bills will be taken care of. If your dog were to get into and damage someone else’s property, this insurance would cover that also.

Some legal liability home insurance policies cover you not just for accidents that take place at your property, but also for ones which happen anywhere in Australia. Some even cover you if the incident happens in New Zealand or worldwide as long as you reside in Australia. You could be away on holiday and playing tennis when a shot accidentally breaks your opponent’s nose. Your insurer would still cover you for any costs.

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

The insurance automatically includes every member of your family that resides in the property the insurance policy is covering.

Is there a liability limit on home insurance policies?

Your home and contents insurance will take care of most of your legal liabilities, and your level of liability coverage is generally more than enough. Most policies in Australia usually include a 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.

What does legal liability home insurance not cover?

While a home insurance policy that includes legal liability is quite comprehensive, there are still a few situations where legal liability won’t cover you. These include:

  • 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.

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