Public liability insurance for landlords: everything you need to know

No matter how conscientious a landlord you are, accidents can still happen in and around your property. Your tenant or their guests may be injured by a faulty piece of electrical equipment, trip over a loose carpet, or grab hold of a loose bannister. Incidents like these can leave you open to a legal claim for compensation, which is why you need landlord liability insurance.

• What is landlord liability insurance?
• What does property owners’ liability insurance cover?
• Why do I need liability insurance as a landlord?
• What are the benefits of property owners’ liability insurance?
• Are there any exclusions or limitations to landlord liability insurance?
• How do I file a claim for landlords liability insurance?
• How to reduce the risk of liability claims

What is landlord liability insurance?

Also known as property owners’ liability insurance cover, landlord liability insurance protects you from potential compensation claims from members of the public if they are injured, or their possessions are damaged at your rental property.

Claims can be made against you by your tenant, one of their guests, or any other member of the public who is on your property.

What does property owners’ liability insurance cover?

Property owners’ liability insurance covers compensation payments to members of the public who suffer personal injury (including death, illness, or disease) or loss of or damage to their possessions where you are proven negligent in relation to your rental property.

For example, if someone visiting your property were hit by a loose roof tile, you may be liable to pay compensation if a claim is made against you. Your landlord liability insurance will pay out up to the limits set out in the policy, including your legal fees.

Insurance also provides cover to defend a claim made against you where you believe you were not at fault for any injury or loss caused.

Property owners’ liability insurance is sometimes included on a landlord building insurance policy, but where a landlord owns the leasehold on a flat – and the freeholder insures the building – it can be purchased as a standalone policy.

How do I choose the right amount of cover for my landlords liability insurance?

Personal injury compensation payments can reach eye-watering sums, especially if the injured person cannot work and/or requires continuing medical care. Lower limits, usually starting at £1 million, are available on the market, but it makes sense to opt for a higher limit. Our landlord liability insurance has an automatic indemnity limit of £5 million, though cover can be arranged for higher limits.

Does property owners’ liability cover tenants?

Yes, property owners’ liability covers injuries to tenants, their guests or visitors, and members of the public.

Does property owners’ liability cover contractors?

If you are directly employing someone to work at your property (i.e. they are your staff and you pay their wages), legally, you must have employers’ liability insurance. Employers’ liability insurance is often included in a landlord insurance policy, with our policies providing an indemnity limit of £10 million.

Property owners’ liability insurance will not cover you for employee injury or illness.

If you are using the services of a contractor not employed by you, they should have their own public liability insurance.

Do I need landlord liability insurance if I am renting to family?

Although it’s not a legal requirement, it’s highly recommended that you have liability insurance. While you’d hope that a family member you’re renting to won’t bring legal action against you, their guests or a member of the public may if they’re injured at your property.

Why do I need liability insurance as a landlord?

According to the Royal Society for the Prevention of Accidents (RoSPA), the home can be a  dangerous place.

Every year across the UK, 6,000 people die from accidents in the home, with around 2.7 million people treated in hospital for their injuries.

Clearly, only some of these accidents were because of negligence by a landlord, but it shows the scale of the risks and why you need to protect yourself with property owners’ liability insurance. Even if you believe you’re not at fault for an accident, that doesn’t stop a member of the public from pursuing you in court, which can result in hefty legal defence fees.

Examples of when you need property owners’ liability

There are numerous scenarios where you would benefit from having landlord liability insurance. Here are some examples.

• Trips and falls, one of the most common types of claims, where a tenant or guest trips over a badly-fitted carpet, a loose floorboard or stair, or falls because of a damaged handrail on a staircase.
• Poorly maintained roofs are another leading cause of claims, where loose tiles slip and fall onto people either on your property, on their own, or nearby public land. Tiles can also cause damage to cars and other properties.
• Electrical systems and appliances can cause electric shocks if not maintained and checked properly. Read more about the electrical checks required and other landlord certificates.
• Leaking pipes can cause water damage to your tenants’ belongings.
• Loose plaster or ceiling tiles can fall, causing injury and damage.

What am I liable for as a landlord?

As a landlord, you are legally responsible for a number of things laid down by various statutes, including the Housing Act 1988 and Homes (Fitness for Human Habitation) Act 2018.

You have a duty of care to provide a safe environment for your tenants, and you must understand your responsibilities to help avoid any damaging personal injury claims.

Broadly speaking, you are responsible for:

• the maintenance of the building and its land;
• providing adequate heating, light, and hot water;
• the electrics, gas, plumbing, and water systems;
• any fixtures, fittings, and furnishings you provide;
• smoke alarms and abiding by fire safety regulations for landlords.

This list is not exhaustive, and you can read our full guide to landlord responsibilities for more information.

What are the benefits of property owners’ liability insurance?

The main benefits of property owners’ liability insurance are:

• Peace of mind that if you slip up with the maintenance of your property, you will be covered for compensation payments to third parties injured at your property.
• Cover for legal fees to help defend a claim against you where you have not been negligent.
• High indemnity limit of £5 million to cover personal injury claims where the claimant may need ongoing care or be unable to work.

Is property owners’ liability insurance mandatory?

No, property owners’ liability is not compulsory, but it is highly recommended.

What happens if I don’t have landlord liability insurance and a claim is made against me?

Without landlord liability insurance, you would not only need to fund your legal defence against a claim but also pay any damages awarded and, potentially, the claimant’s legal costs too.

Depending on the severity of the claim, the total costs could run into millions of pounds if, for example, the claimant needs ongoing medical care or cannot work. Although many claims are much smaller, they may still be beyond your capacity to pay, and you could find yourself in financial trouble.

Property owners’ liability insurance will pay for your defence costs and any awards against you.

What is the difference between property owners’ liability and public liability insurance?

There are some fundamental differences between property owners’ liability insurance and public liability insurance.

Whereas public liability insurance relates to liabilities arising out of all the activities of a business that may have high public footfall, property owners’ liability insurance is tied to a specific rental property or group of properties if the landlord has multiple rentals.

For example, a builder’s public liability insurance will cover claims made by third parties who visit their premises, and any damage they cause while carrying out their work away from their premises.

Property owners’ liability protects landlords solely for claims made against them for personal injury or property damage suffered by third parties in relation to the insured rental property.

Are there any exclusions or limitations to landlord liability insurance?

Landlord liability insurance is limited to your responsibilities solely in relation to your role as a property owner and not for any other business activity you undertake.

There will also be an indemnity limit on the policy, which can be set from £1 million up to £5 million, or even £10 million for an additional premium depending on the insurer. Your policy would not cover costs in relation to a claim, including your legal fees, awards, and the other parties’ legal fees, above your indemnity limit.

The following are standard exclusions:

• war, civil war, rebellion, revolution, insurrection, and civil commotion;
• nationalisation, confiscation, requisition, seizure, or destruction by Government or any public authorisation. Any action taken in controlling, preventing, suppressing or in any way relating to the previous;
• employers’ liability.

Can I purchase property owners’ liability insurance with other types of insurance?

Property owners’ liability insurance is often included within a landlord insurance policy, which can also include buildings and contents cover, loss of rent, damage to your property by the tenant, and legal expenses cover in case you have problems with tenants.

It is also possible to buy property owners’ liability insurance as a standalone policy.

How do I file a claim for landlords liability insurance?

You must notify your insurer as soon as a tenant or member of the public complains to you about being injured or suffering damage to their belongings while in or on your property.

Along with your claim form, send copies of any third-party correspondence you have received, including if you have received letters from a solicitor holding you responsible. Also include copies of any risk assessments carried out at the start of the tenancy, copies of any landlord inspections carried out since then, and copies of any previous correspondence with the claimant that could relate to the claim.

You mustn’t enter into any negotiations with the claimant, admit liability, or offer to pay for the injury or damage caused. Based on the evidence provided, your insurer will assess the claim and decide whether they feel you are negligent in the circumstances.

They will negotiate with the third-party to settle the claim or fund your legal defence if they do not believe you have been negligent and the claimant proceeds with legal action.

How to reduce the risk of liability claims

By identifying and addressing potential risks, you can help ensure the safety and well-being of your tenants and protect yourself from potential legal action.

Landlords can take these simple steps to help reduce the risk of liability claims:

• Complete a risk assessment at the start of the tenancy, covering all areas most likely to lead to claims, such as flooring, roofing, ceilings, staircases, and any furnishings supplied. Keep a copy of the risk assessment.
• Make sure your electrical and gas safety checks have been carried out (a legal requirement) and any appliances provided are PAT tested and in safe working order.
• Keep an inventory of everything you have provided in the rental property so that you know if, for example, an appliance or item of furnishing that causes an accident belongs to you and not the tenant.
• Carry out regular mid-term inspections so that you are aware of any potential issues. Make sure these are documented, including photographs, and signed by the tenant. Address any possible risks straight away.
• Ensure your tenants know how to contact you and ask them to get in touch as soon as they notice a possible risk to safety. Rectify any problems straight away and keep a record of the remedial action taken.
• Keep a record of any correspondence with a tenant which could later relate to a claim. For example, if they have repeatedly refused you access to the property to rectify an issue, this could later form part of your defence if a claim arises.

Landlord public liability insurance is an essential part of your risk mitigation strategy, giving you protection in the event of an accident related to your property. Speak to one of our property insurance experts on 01603 216399, or request a quote online.