Liability cover: the little-known benefit included in your home insurance
Along with protecting your home and possessions from damage and theft, your home and contents insurance also includes a type of cover called legal liability.
Legal liability protects you from liability if someone is accidentally injured on your property if you have buildings insurance, or if you or a family member accidentally injures someone away from your home if you have contents insurance.
It also provides cover if you or a family member is liable for loss or damage to another person’s property.
QBE’s home and contents insurance policies include legal liability coverage up to $30 million. Exclusions may vary so always read your Product Disclosure Statement (PDS) to check your cover.
Common liability claims
Common liability claims can include if you’re found liable for causing injury, such as a guest tripping and falling in your home, according to Head of Product, Retail, Larissa Medway.
“Dog bites are another example of where legal liability may apply,” she says.
“If your dog bites another person and you’re found liable, the medical bills could be claimed as part of your contents insurance,” Medway says.
“If a tree branch has fallen from your backyard and damaged your neighbour’s cars, garage or the roof of their home and you’re found liable, the costs of this damage can be claimed on your home insurance.”
Your immediate family member’s legal liability is included in QBE’s home and contents cover, if they permanently live with you.
“Under our contents cover, liability protection also extends to accidental injury to others outside your home, whether in Australia or overseas, so if you accidentally injure a person on holidays and you’re found liable for those injuries, those associated costs may be covered,” Medway says.
How liability works with tenants and landlords’ insurance
Landlords are responsible for the property they lease to tenants, which means they may be legally liable if a tenant is injured on the property.
Tenants have a right to live in a safe property, so known issues and repairs should be carried out in a timely manner. If a landlord fails in their duty of care or responsibility to a tenant, they could be exposed to financial consequences.
Landlords must take reasonable care to prevent any loss, damage or injury, Medway says.
“For example, a landlord may not be covered if they are found to have failed to take reasonable care in responding to a known maintenance issue. When assessing this, factors such as how much time the landlord had to take action, what steps were taken to address the issue, and whether the injured person was aware of the risk are considered.”
It’s therefore important for landlords to stay on top of maintenance, especially if a tenant’s safety is at risk, she says.
Landlords may want to consider liability insurance from the moment they buy a property.
“Landlords have a liability exposure as soon as they own a property, so it’s really important to consider the start date of your insurance policy, particularly when the property is on the market for inspection and agents begin to take potential tenants through the property,” Medway says.
Related article: Landlord insurance for rental properties
On the flip side, tenants may want to consider liability insurance as well, because they could be found liable for incidents in certain circumstances too.
A tenant’s liability can be protected if they have renter’s insurance or contents insurance, because the policy includes legal liability.
“If a tenant leaves a candle burning when they leave their home and the apartment is set on fire, or if a tap is left running and the sink overflows into the neighbour’s place, the onus is on the tenant – not the landlord – to pay the damage,” explains Medway.
Why your legal liability may not be covered
There are some situations where exclusions will apply in relation to legal liability, which means you may not be covered if that event occurs, explains Medway.
In addition, if you cause damage to your own property or if you injure a person who lives with you, you may not be covered under legal liability.
“We also can’t cover liability claims that involve your trade or business, or liability claims that could be made under workers compensation. For example, if a tradesperson has an accident in your home while on the job, this claim would fall under their workers compensation insurance, not your personal liability,” Medway says.
