It’s something most of us don’t think about until a neighbour’s child falls off an unstable wall in the garden, or a cleaner falls on a wet floor, and the thought flashes past – could I be liable if they make a claim against me? Possibly the more relevant question would be: “If I am liable, how protected am I?”
Take the example of someone having an accident in your home. If it is proven that you were at fault – such as by failing to fix a potentially dangerous wall – and someone has an accident, gets ill, is injured or dies, they could have a case against you. So how can you protect yourself?
What is liability insurance?
This type of insurance protects you in the event that you are sued and held legally liable for malpractice, injury or negligence. Typically it will cover the cost of both legal bills and any payouts that might arise from legal action.
For example, a doctor would need such insurance to protect against malpractice suits, while a retail outlet would also need protection in the case of injuries in the shop.
However, it’s not just professional outfits such as these that need protection.
As a homeowner, you could also find yourself in the courts – perhaps because you were found to be negligible in the case of the dangerous wall mentioned above for example.
How do I get protection?
The good news is that home insurance policies come with occupiers' liability protection. Cover typically is offered for up to about €3 million in total. Allianz for example, offers protection of up to €3,175,000, while Axa has a limit of €3 million. Thus, simply having home insurance cover will protect you against any costs, expenses or fees that you could be liable for up to that ceiling if someone was to bring a case against you.
Who does it cover?
For Jim Power, of Power Insurances in Limerick, a good rule of thumb is that if the accident or damage to property happens to a visitor in your house, they will be covered. But if it's a family member living in the house, they will generally be excluded.
Such insurance will also cover death or injuries to domestic employees such as nannies, cleaners and chauffeurs. And if you tend to play a bit wild on the golf course, you should note that cover will also extend to golf caddies for injuries caused by you.
What about workmen in my home?
If you employ people to carry out work in your property, you should always check that they have their own public liability insurance. Otherwise, if they damage your home, it might not be covered under your own insurance. If they suffer an injury as a result of working in your home, however, you could be liable, but be wary of a distinction that exists.
According to Power, if someone is involved in the maintenance of the property, such as a cleaner or plumber, they will typically be covered under your policy. If, however, they are structurally altering the property, such as a builder working on an extension, they may not be.
What if I damage someone else's property?
Liability insurance will also protect you in the event that you cause accidental damage to someone else's belongings. This extends to a tree from your garden falling into a neighbour's property and causing damage.
Always check your policy before you make any personal payouts for repairs, replacements or compensation. You may be entitled to make a claim, instead of having to pay yourself.
What about visitors' belongings? My washing machine recently leaked ruining a friend's designer handbag and she is looking for compensation. Will I be covered for this?
Most policies will offer cover for visitors' belongings but, if it emerges that you are liable for the destruction, whether or not you're covered will depend on your policy. Aviva, for example, covers loss or damage, including accidental damage, to visitors' personal belongings while in your home if it's as a result of one of 10 events. These include subsidence or landslip; falling trees or branches; fire; leaking and attempted theft.
In the example above, however, while Aviva might offer compensation, whether you’re fully covered or not might depend on the brand of the designer handbag. It only offers cover of up to €400 for visitors’ belongings – so if it’s a Chanel or Louis Vuitton bag there will be a shortfall.
Similarly, if you have a domestic employee such as a nanny or cleaner working in your home, their personal property will be covered under the conditions outlined above. A notable exclusion to this cover, however, is money.
I've been struggling as a result of the recession and have started letting out my spare room to guests via online accommodation site AirBnB to earn some extra cash. What if they have an accident while staying in my house?
Check the terms of your policy. Some insurers, such as Allianz, automatically provide cover for up to six paying guests staying in your home – and cover can be attained for up to 12 guests if you pay an additional premium. Others may not be so generous.
I am planning on having a party in my garden for my wedding anniversary. Will my guests be covered?
It's likely that you will have to inform your insurer of such an event and pay a premium for cover to include all the guests.
Will I be covered if my dog bites someone?
Yes, provided your dog – or cat or horse – is a typical household pet. Should you have any pets that are listed under the Control of Dogs Act 1986, or beyond the realms of a "normally domesticated animal", it's possible you will be excluded by your insurance company.
Are there exclusions?
As with all insurance policies, there will be exclusions, so before you breathe a sigh of relief, check the small print.
As previously mentioned, home insurance won’t cover incidents involving a family member, or structural developments to your property.
In addition, in the case of tree felling or lopping operations, for example, many insurers will cover any legal liability. Similarly, if the liability is with regards to your involvement in farming, or involves independent consultants or their employees, you won’t be covered.
In addition, “any wilful, malicious, deliberate or reckless act” by you, will not be covered.
I've just received a "formal notice" from the Injuries Board. What happens next?
If someone has made a claim against you through the Injuries Board, you will receive a "Formal Notice", which you will typically pass onto your insurance company. You will also be charged a fee of €600 (reduced from €850 since January) although this will be covered by your insurance company if you have sufficient cover in place.
