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Public Liability Insurance: How Important Is It?

How important is public liability insurance?

Where rental properties are concerned, the burden of providing sufficient public liability insurance falls solely on the landlord’s shoulders. And, in spite of being watchful, accidents can and do happen. Because of this, it is imperative for landlords to have adequate insurance in place before they put their property on the rental market.

Prevention

Avoiding insurance claims and disputes are the best way for a landlord to deal with the situation. It is the right of the tenant to live in a property that is safe, clean and in good condition. It is also a landlord’s responsibility to ensure repairs are completed in a timely manner and to take action as soon as a problem has been reported. When landlords fail to to do their duties and responsibilities, the results can be disastrous.

The Insurance Case

It is important that landlords purchase landlord insurance to protect themselves from public liability claims such as these. With this, landlords can be confident that they are covered for public liability for the price of just several hundred dollars annually. Not only that, landlord insurance is tax-deductible against the income derived from the investment.

Read the Policy Carefully

Not all policies are the same, it is crucial to read it carefully and thoroughly. When buying insurance, your main concern is to make sure that you have sufficient coverage for the risks you may face as a property owner.

The coverage may include the following:

  • Natural Disasters – storms, lightning strikes, fire, flood, earthquake and tsunami
  • Loss or Damage – contents such as damage by pets, accidental or malicious damage
  • Accidental Damages – these are damages caused by tenants, theft, malicious damage, as well as non-payment of rent

Injury to Tenants and Third Parties

Another thing that a landlord insurance usually covers is the public liability insurance or legal liability cover. This insures the landlord for death or injury to other people or damage to other people’s property. Such instances are as follows:

  • An old gas heater leaks
  • Timber on the stairs, balustrade, balcony or decking rots
  • When a piece of old carpet comes loose

Public liability insurance generally covers up to $20 million for the landlord’s legal liability for an incident at their rental property. In cases where the landlord is found to be legally liable, the public liability insurance will cover for the following:

  • The damages awarded to the claimant.
  • The landlord’s legal costs in defending the claim.
  • The claimant’s legal costs, if it was found that the landlord is at fault.

Imagine just how expensive it would all be without the public liability insurance to cover all of these costs.