Landlord Liability Insurance

Landlord liability insurance

Sooner or later it will happen. You will receive that dreaded phone call from a tenant saying that someone has been injured due to a fault in your property, and asking what exactly you plan to do to compensate them. Those are not the circumstances under which you will want to start thinking for the first time about whether or not to purchase landlord liability insurance.

These risks are real. Accidents do happen and as a landlord your liabilities are clear. If your tenants are injured on your property by something that is part of the property or rental (this may even include furniture such as a collapsing chair etc) then you may very well be liable for any claims arising. This liability also applies to any visitors your tenants may have as well as cleaning or maintenance personnel you ask to work on your property when empty. Even passers-by can be an issue if something such as a slate falls off of your roof and injures them on the street below.

If the property you’re renting out is commercial, your liabilities may be even greater. If the public are entering and leaving the premises and suffer injury then even if your commercial tenant has liability insurance themselves you may still find that you can be held legally liable in some circumstances.

It would also be a mistake to assume that my rental is too small to count. Even if you have a small property that is only rented out for a few weeks a year as a holiday home, you will have the same legal liabilities.

The courts can be notoriously unsympathetic to a landlord’s claims of “Act of God or “I couldn’t have known. They won’t care and the awards against you could be very high indeed if serious injury is involved.

Different types of cover

So unless you have very large amounts of surplus personal finance that you are prepared to pay out following such an accident, thinking about landlord liability insurance in advance may be a sensible idea.

There are many forms of landlord insurance covering various risks. Some policies may offer a form of global cover protecting you not only against liability but also things such as stolen fixtures, fittings or contents, malicious damage of the property and its contents and tenants that have fled leaving large rent arrears. They can also cover your property while it is empty between rentals or undergoing work.

The various forms of landlord insurance policies are so important that some lenders may actually insist on insurance of this type being in place before they will advance funds for the purchase of a property on a buy to let basis.

If this sounds a little complex, in fact it can be. Landlords insurance is a form of commercial insurance whether your property is let for commercial or residential purposes. To ensure that a given landlord has the right form of policy and at the right price requires expertise that may not be available in every insurance provider.

Fortunately, there are companies that specialise in the provision of landlord liability insurance as well as other forms of landlord protection. It may be sensible to contact them to fully understand the risks you face and the options you have to cover them.