Find out what is landlord liability insurance in our latest article.
Every landlord has a legal responsibility to supply a safe home and many accidents can be prevented by carrying out regular maintenance and repairs. Though despite taking all the precautions, accidents can still happen. This is where liability insurance comes into force.
What is landlord liability insurance?
Liability insurance is an insurance cover that protects you from potential compensation claims related to your rental property; i.e if someone injures themselves or other property is damaged as a result of your property. It is a type of public liability insurance that is there to pay the compensation and any resulting legal fees to a third party such as a tenant, visitor or tradesperson. If your tenant hurt themselves tripping on a damaged floorboard or a loose tile were to fall off the roof and hit a passing pedestrian, you may be liable to pay compensation if a claim was made against you. Under the circumstances; your landlord liability insurance would step in to pay any related compensation, expenses and legal fees, up to the limit of your policy.
Insurers and their solicitors will also defend policyholders against claims where a third party has alleged that they are at fault, though they actually were not negligent. In this scenario they will defend you and, if you are found not negligent for injuries caused, insurers will provide cover for the defence costs required to defend the claim on behalf of the landlords.
Why do landlords need liability insurance?
The fact is accidents can happen to the most careful of landlords. Liability insurance is therefore vital for peace of mind even under the circumstances of a false claim.
Public liability insurance is not a legal requirement for landlords. However; if a claim is made against you and you may be required to attend court and if the case is lost. These costs may be considerably high.
Some liability claims can run into millions of pounds. For example, if a tenant had an accident that caused a life changing injury, you could be liable for medical expenses and loss of income for the rest of their lives.
Liability coverage is a standard offering in most landlord insurance policies, but it’s important to check it is definitely included in your policy.
What are the most likely causes of liability
The Defective Premises Act outlines certain duties of care that landlords owe their tenants and visitors to their property. This includes the legal obligation for landlords to protect their tenants and visitors from suffering injury or damage to property caused by defects in their rental property.
Some of the more common defects to be aware of include:
- Damaged floorboards that someone could fall through or trip on
- Worn or loose carpet that could cause a trip or fall
- No handrails or damaged handrails on staircases
- Loose plaster – particularly on ceilings, which could fall and cause injury
- Poorly maintained shower or hot water system that could cause burns
- Leaking pipes that could damage tenants’ belongings
- Poorly maintained roofs
Landlords are also responsible for any defects in communal areas of rental properties, as well as those in outdoor areas, for example potholes on a driveway, cracked paving stones on a path or loose tiles on the roof.
Duty of care and negligence
As well as the duty of care laid out in the 1972 Act, landlords have a legal obligation to make sure their property is fit for habitation and that the property is safe and free from serious hazards.
Although not all tenant injuries are the fault of the landlord; it is important to understand your responsibilities to avoid any personal injury claims. For a landlord to be deemed liable for injury to a tenant, it must be shown that they were negligent in some way. Negligence is defined as a failure to take reasonable care to avoid a foreseeable risk of injury.
A landlord would be considered negligent if they didn’t carry out repair work needed after the tenant had informed them of the defect. If as a result the tenant injured themselves or their belongings were damaged. It would also be negligent if the landlord did carry out the repair work but carried it out carelessly.
It is important for tenants to let the landlord know if repairs are required and for landlords to act promptly. Since most of the liability claims are as a result of poor maintenance, it pays to carry out repairs promptly and keep the property well maintained and to keep it in a good state of repair.
How to reduce the risk of liability claims
There are five key steps landlords should take to reduce the risk of liability claims:
- Carry out a risk assessment before the start of the tenancy. It is important to have documented evidence a checklist was conducted.
- Carry out regular mid-term inspections and make sure these are documented and signed by the tenant. It is also beneficial to take photos when carrying out inspections
- Ensure your tenants know how to contact you and request your tenants to inform you about any repairs that need doing or any issues that might cause injury and carry out repairs carefully and promptly. It is also sensible to keep a record of dates and times you were made aware of any issues and when they were repaired and what remedial work was you did to rectify the issue, so that you have an audit trail if required
- Carry out regular maintenance to ensure the property and all exterior areas are safe
- Ensure you have comprehensive landlord insurance which covers you for landlord liability
What you need to do if a liability claim is made against you
If a liability claim is made against you, it’s important to follow the below standard procedure
- Do not admit liability or make any offers of compensation
- Take time-stamped photos if it is safe to do so
- Report the claim to your insurer, forwarding all third-party correspondence unanswered and providing as much information as you can. Late notification or failure to cooperate with insurers during their investigations can complicate your claim
- Make any repairs to the property that are necessary and keep any invoices and receipts for purchases or work carried out
What to look for in your public liability policy
Most landlord insurance policies will include liability cover as standard, but it’s important to check. Landlords should be aware that any incident that took place outside the period of insurance would not be covered.
Liability insurance is vital part of any landlord insurance policy as it offers protection if a tenant or visitor is injured in your property. Liability insurance is sometimes mandatory depending on policy. Landlords should make sure they pick up any safety issues in their property by carrying out mid-term inspections, encouraging tenants to report repairs and attending to issues promptly. If a landlord has carried out due diligence, but a third party is still insistent on sueing, then at least the landlord has the evidence he needs and in the knowledge that, by having liability cover, the insurance company will do all they can to defend.
Unfortunately, no matter how well prepared you are, the unexpected situations can still happen, which is why we recommend that you have the right insurance in place to provide comprehensive cover.