What is Landlord Liability Insurance?
Landlord liability insurance is designed to protect property owners from any claims made by third parties resulting from accidents, injury, loss, or damage to them or their personal property.
Renting a property for investment purposes is a fast-growing way to make an income. Buy to let purchases are increasing rapidly as the demand for rented property grows. Whether you are a landlord that rents homes to private tenants or you lease commercial property to business owners, there can be many risks to watch out for.
Along with expected problems like tenants not paying rent, there can be occurrences like property damage or claims made against you by visitors to the property. These are often for slips and falls due to uneven or poorly maintained flooring, injury, or damage caused by falling materials like plaster or roof tiles.
In these instances, if the building is in disrepair or not maintained correctly, then the landlord could be responsible for paying any successful claims. Compensation amounts can run into tens or hundreds of thousands of pounds depending on the nature of the damage, so it is important to have the correct coverage in place to provide protection.
Landlords liability insurance will prevent the landlord from having to pay large settlement sums, including the cost of legal expenses. In addition, it will protect personal assets and finances as claims will be covered by the insurer and not paid for out of pocket. This can cover associated items like medical treatments or the cost of repair or replacement of the third-parties damaged possessions.
Is landlord insurance the same as public liability insurance?
Landlord insurance and public liability insurance are not the same, but liability insurance is frequently part of a landlord insurance policy. These policies usually include buildings insurance and liability insurance, then other coverages like contents cover can be added as needed.
A landlord insurance package provides the advantage of holding all insurances under one main policy, eliminating the need for tracking several different monthly premium payments. It also provides the benefit of being able to renew everything at the same time as everything is held under one umbrella policy.
Other insurances that may be added to landlord insurance can protect against things like non-payment of rent or wilful or accidental damage to the property. Policies can also be added that protect empty properties from harm from things like fire or flooding. Cover can also be obtained to shield from malicious damage due to break-ins or vandalism.
The cost of empty property coverage is often higher as the risk of damage from fire or water may be undiscovered for a longer period in empty properties. As a result, the damage can be worse in an empty building than in an occupied building.
How much public liability insurance do landlords need?
The amount of public liability insurance that landlords will require can be affected by several factors. For example, claims for injury or vehicle damage are reasonably common. Still, landlord liability insurance, also known as property liability insurance, can protect from some less common claims, such as misuse of data or safety legislation breaches.
As with other insurances, the higher the assessed risk, the higher the monthly premium will be, and several property factors can affect the level of cover needed.
In general, costs for a complete landlord insurance package covering liability and the building can be affected by things like:
- Rebuild Cost
- Size of building
- Type of building
- Number of occupants
- Building use (private rental, commercial)
- Age of building
The building’s age is taken into account when assessing insurance coverage because this can affect the cost of a rebuild. Typically the older a building is, the harder the rebuild will be; therefore, premiums will increase.
The liability element of most landlord insurance policies range from £2 million to £5 million of coverage, but it may be best to seek professional advice to determine the correct policy limits. Without the correct coverage, a landlord’s personal property and assets could be at risk, so it is important to have adequate cover in place.
On average, landlord insurance starts from around £20 per month for the basic cover of buildings and landlord liability; as policies are added, the premiums increase. Landlord insurance will not provide cover to tenants’ belongings for events like theft, so occupiers or renters of the building will need to purchase a content insurance policy of their own to protect their personal items.
Even though landlords may be personally at financial risk if any claims are made, there is no legal requirement for property owners to obtain landlord liability insurance. While the law does not insist on coverage, most landlords recognise that there are several possible areas where claims may be made against them and opt to purchase protection. Whether renting a single property or multiple properties having insurance cover in place makes sound business sense.
To learn more about landlord insurance and obtain your own landlord liability insurance policy, search for NimbleFins.