Personal liability insurance is a component of a standard home insurance, condo insurance or tenant insurance policy. If you or a household member have legal action brought against you because a third party alleges you caused them bodily injury or damaged their property, your personal liability insurance company will provide funds necessary to cover the cost of your legal defence and costs that arise should you be found liable. That could include medical expenses and compensation for pain and suffering in the case of bodily injury or the expense of replacing the destroyed item in the case of property damage.
Personal liability insurance covers legal fees, court costs, medical expenses and property damage settlements resulting from third-party bodily injury or third-party property damage caused by your actions or that took place on your property. Your insurance carrier will provide funds to cover those expenses up to your policy limits.
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What Are Some Examples Where You Would Need Personal Liability Insurance?
When they need to understand a type of insurance coverage, such as personal liability insurance, Ontario residents often find it easier to grasp when they hear real-life scenarios that describe situations that could be (and have been) claimed under personal liability insurance.
Some examples of conditions in which you would need personal liability coverage include a delivery driver slipping on your walkway due to ice buildup from a storm, spilling a cup of coffee on a guests purse during a party due to a loose carpet, or even if some local kids trespass into your backyard and proceed to get hurt jumping on your new trampoline.
These and many more situations are why personal liability coverage is essential to your policy. Speak with a Morison Insurance broker today to ensure you are properly covered.
Who needs personal liability insurance?
In short, absolutely everyone needs personal liability insurance. Ontario residents are just as susceptible to mistakes and accidents as anyone else. Most people only have hundreds of thousands of dollars available in their budget to cover the cost of litigation without experiencing major financial setbacks. There's no sense in suffering a huge financial disruption if you're faced with unexpected expenses related to liability issues when you can protect yourself against financial losses with personal liability coverage.
What's not covered by personal liability insurance?
When considering what is and is not covered by personal liability insurance, Ontario residents need to know that any third-party bodily injury or third-party property damage that occurs as a result of business activities—even if the injury or damage takes place at their residential property—will be excluded from personal liability coverage. Business-related mistakes, accidents or mishaps fall under professional liability insurance coverage or commercial general liability insurance, which is a standard part of a comprehensive business insurance policy.
For example, imagine you're a personal trainer and sometimes have clients work out in your home studio. You are left lying out if a client walks in and is injured when they trip over a yoga mat. The resulting costs would fall under commercial general liability on your business insurance policy, not your personal liability coverage on your home insurance policy. But if a friend came over for a casual visit and tripped over that same yoga mat, the resulting claim would apply to your personal liability insurance because the friend wasn't on your property for business reasons.
It's also important to understand that personal liability insurance only applies to liability situations. Suppose you or a household member accidentally injures yourself or destroys something you own. In that case, your personal liability insurance carrier will not provide funds to assist with medical bills or replacement for the damaged property because there's no element of liability when you hurt yourself or damage your own property.
Regarding personal liability insurance, Ontario residents need to know that coverage will also not apply to any incidents where you or your household member intentionally causes damage or injury. Furthermore, it does not apply to liability situations that occur while you are driving or in your vehicle, as the liability coverage portion of your auto insurance policy would handle those scenarios.
Is Personal Liability Insurance Included On My Home or Tenant Insurance Policy?
If you have comprehensive home insurance, tenant or renters insurance, or a condo insurance policy, you can count on personal liability insurance is a part of it, along with types of coverage such as property and contents coverage; personal liability insurance is automatically included with homeowners insurance or tenant insurance.
Does Personal Liability Insurance Apply When Travelling?
Yes, it does. The personal liability insurance portion of your home or tenant insurance policy applies worldwide when you accidentally cause third-party injury or property damage. Regardless of where you are at the time of the incident, if you are found to be liable, you can get financial support from your personal liability insurance provider to cover related costs such as legal fees, a replacement for damaged property, medical expenses and other settlement costs such as compensation for pain and suffering.
