Protect yourself and your buy-to-let investment
Did you know that if your tenant trips over a broken tile in your property’s kitchen and breaks their leg, you could be sued? Imagine having to find the cash to cover your tenant’s lost earnings and medical bills. Do you have a few thousand tucked away to pay such a bill? Could you afford to put your buy-to-let investment at risk?
In this article, we discuss why you need public liability insurance and the types of liabilities it should cover.
What is a landlord’s public liability insurance?
Usually included in buy-to-let landlord insurance, liability insurance protects you if a tenant, tradesperson or visitor to your property makes a claim for compensation against you. Even though your investment property is classed as the tenant’s home, you can be liable for any accident that occurs in it. Public liability insurance (also called ‘landlord’s liability’) will cover you for:
- Damages awarded to the claimant
- Any legal costs you incur when defending against a claim
- The claimant’s legal bill if you are liable
The claimant will have to prove that your property caused the damage. If this proves correct and the claim is found against you. The insurance covers all the above up to the amount for which you have paid your insurance premiums.
Five liabilities your landlord liability insurance could cover
You will be surprised at what you can be held liable for in your property – a property which you may not have visited for months. Here are five liabilities which your policy could cover:
If you haven’t maintained the property and an injury occurs because of it. The landlord is negligent and therefore responsible for the injury.
2. Dangerous conditions
If the claimant can prove that you should have known about a dangerous condition, and failed to put it right or warn about it, then you will be held liable for damages. Therefore, it’s important not to neglect effective property inspections.
3. Other liability claims
It’s not only personal injury for which claims can be made against the buy-to-let landlord. Claims that can be brought against you include invasion of privacy, libel (for example, any defamation of character on emails) and slander.
If your tenant has a pet, and it attacks the postman on your premises, they could sue you. It is on the ‘should have known’ assumption. You should have known that the dog liked the taste of a postie’s backside. Do you want to let to a tenant with a pet?
5. Tenants who don’t know how to behave
In the same way that you are held responsible for damages caused by your property, you can also be held responsible for the actions of your tenants. If your tenant is continually abusive or disruptive to neighbours, for example, you should take steps to protect others from your tenant. In the worst-case scenario, you’ll need to understand the rules for the buy-to-let landlord to evict nightmare tenants.
Do you need public liability insurance?
It’s not a legal requirement to take public liability insurance. But accidents happen, don’t they? It could be a loose carpet or trailing cable that causes your tenant to trip and fall. And that fall could cost you thousands.
How much public liability cover do you need?
Compensation claims can be enormous. Lost earnings, medical bills and legal costs add up quickly. Whichever level of cover you select will be the maximum the insurance company will pay out. For your peace of mind, you should consider cover in the millions of pounds rather than thousands.
Where can you purchase landlord’s public liability insurance?
Most insurance companies will offer public liability insurance. Often, landlord insurance covers such liability as standard. Whether you buy public liability insurance as a stand-alone policy or as part of a wider-ranging landlord insurance policy, you should:
- Read the policy thoroughly, and question any clauses, conditions or exclusions which you don’t understand.
- Consider building your insurance around your public liability insurance, including cover for furniture, fixtures and fittings, unpaid rent, and enforced void periods.
Want to know more?
As professional investment property managers, we help our clients assess their insurance needs. We conduct regular property inspections, to ensure all maintenance works taken care of as quickly and cost-effectively as possible. We understand that the condition of your property is every bit as important as the choice of tenant.
Yours in effortless property management,