Will your home and contents insurance protect you financially if someone is injured in your home? Read on.
There are several important reasons why every homeowner should have home and contents insurance. One reason you may not be aware of is because of the public liability cover these policies offer.
If someone suffers an accidental injury on your property, you could be held legally liable and be forced to pay damages. However, Australian home and contents policies typically offer a large amount of public liability cover so that you won’t be left significantly out of pocket.
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Do I need public liability insurance for my home?
How important is public liability cover? Well, picture this:
You book a plumber to take a look at the shower in your second-storey bathroom, but while he’s climbing the stairs the rickety old railing gives way and he falls down a dozen stairs, breaking several bones.
In another scenario, you’re hosting a dinner party in your garden when one of the guests slips on a loose stone path and breaks their hip.
In either of the above scenarios, you could potentially be held legally liable and forced to pay a significant amount of money in damages. Accidents can and do happen at any time, and if someone suffers an accidental injury while on your property then the financial consequences can be severe.
However, the good news is that it’s quite easy to protect yourself against this risk.
Is legal liability included in my home insurance policy?
Now that you know just how important public liability protection is, you’re probably wondering how you can get cover. Happily, public liability cover, which is often also referred to as legal liability cover, is a common feature on home and contents insurance policies.
Most policies offer a large amount of cover – usually between $10 million and $20 million – but it’s worth checking the fine print of the product disclosure statements (PDS) to find out exactly what is and isn’t covered.
What will I be covered for?
Both the legal liability cover on your home and your contents insurance policy should provide cover when you’re required to pay compensation for:
- Death of or bodily injury to other people that happen at your home
- Loss or damage to someone else’s property
Most policies include at least $10 million of insurance which includes cover, not only for any compensation you may be required to pay, but also for all associated legal costs.
Most contents insurance policies will also cover any incidents that occur not just at your property, but at any location throughout Australia or New Zealand.
In addition, if you live in the Australian Capital Territory, Tasmania or Western Australia, you can choose to take out optional domestic worker compensation cover as part of your home insurance. This provides cover if someone suffers an injury while working for you on your property. However, separate insurance policies to cover workers are required in all other states and territories.
What won't I be covered for?
While the legal liability cover provided by your home insurance policy offers protection in a broad range of situations, there are some circumstances and events that are usually not covered. These include:
- Injury to someone who normally lives with you, or damage to their property
- Injury to your employees, or damage to their property
- Claims related to your business or trade (NB: If you want public liability insurance for your business, check out our comprehensive guide to cover)
- Damage to your own property
- Loss or damage to property in your care, custody or control
- Claims that arise due to exposure to asbestos
- Claims that arise because your property is undergoing extensive renovations or alterations (NB: this exclusion usually applies to works that cost more than a specified limit, such as $50,000 or $75,000)
- Claims caused by pregnancy or the transmission of disease
- Claims for libel or slander
- If the claim is the result of damage caused by any animal other than your domestic dog, cat or horse
- If you enter into an agreement or contract admitting liability
The list of exclusions and the level of cover available varies between insurers and policies, so make sure to read the PDS closely.
Public liability cover is a crucial component of any home and contents insurance policy. With this in mind, remember to check how much cover an insurer provides (and in what situations) when searching for the right policy for your needs.