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Liability Insurance for Rental Property

Liability Insurance for Rental Property

As a landlord, you have a responsibility to provide safe housing for your tenants. This includes a dwelling that meets building codes and homes that have safe locks. If something happens on your property, such as a break-in or any other criminal activity, you may be held liable. That’s one reason to run background checks on all prospective tenants, but you also want liability insurance to protect your assets.

Your property insurance already covers the housing complex in a case of fire, theft, burglary, or adverse weather event. But the landlord liability policy saves you from legal claims made by your tenants or other visitors to your property. Legal claims could result from a tenant injury on your property or property damage. At IRM Insurance, we’ll create a landlord liability insurance policy that protects your property and your financial assets from legal claims against you.

What Is Landlord Liability Insurance?

What Is Landlord Liability Insurance?

Even if you’re just renting out a second home or vacation home, a regular homeowner’s insurance policy will not cover liability issues you encounter as a landlord. Landlords need liability insurance that protects them and their property from legal claims. Landlord liability insurance can cover the cost of an attorney to defend yourself against a lawsuit, settlements, penalties awarded to a plaintiff, up to the limits of your policy. 

Without liability insurance, you’d be financially responsible to cover the cost of mounting a legal defense against a claimant, paying for repairs or medical bills, and paying any fines or penalties. Without liability insurance, one legal claim can cause financial problems for you, which may cause your loss of the rental property and other assets you own.

Insurance Coverage Options for Rental Properties

Insurance Coverage Options for Rental Properties

As a landlord, you have to be cautious about who you’re renting to. Performing financial and criminal background checks on your tenants is one way to protect yourself and your property against damages and legal claims. But you also have to keep your premises safe and clean to prevent injuries.

Here are some examples of what your liability policy may cover:

  • Tenant injuries
  • Vandalism
  • Lock replacement
  • Unlawful behavior by tenants
  • Rental property under construction
  • Building codes
  • Burglary

This doesn’t mean you’d be legally responsible whenever any of these events occurred. However, if the locks on your tenant’s homes are old and out of date, you may be held liable for a burglary that occurred. Similarly, if one of your tenants committed a crime on your property and you rented to them without running a background check, those could be grounds for a lawsuit against you.

Cost of Landlord Liability Insurance

Cost of Landlord Liability Insurance

The costs of landlord liability insurance will vary, depending on the coverage areas. Determining factors also include the size of your rental property, the number of tenants, and the state of your property. New or newly remodeled buildings can be less expensive to insure, and you may get a discount for insuring multiple rental properties.

FAQs about Liability Insurance for Rental Property

Why Do I Need Landlord Liability Insurance?

Why Do I Need Landlord Liability Insurance?

Landlord liability is necessary to protect your rental property and your financial assets. Without adequate liability coverage, you’re responsible for paying legal claims, damages, and penalties or fines awarded by a court. With liability coverage, you reduce your financial risk as the insurance policy takes on that burden in your stead.

How Can I Save Money on Liability Insurance?

How Can I Save Money on Liability Insurance?

You can save money on liability insurance by bundling insurance for multiple rental properties. New or newly remodeled properties may also be cheaper to insure than an older unit. Regular safety inspections and compliance with all local building codes is vital to protect yourself from legal claims. Additionally, you need to be diligent in performing background checks on potential renters.

What Is Covered by Landlord Liability Insurance?

What Is Covered by Landlord Liability Insurance?

Landlord liability insurance will pay for legal expenses, tenant injuries, and lock replacements after a burglary. Tenant injuries are an important concern for landlords, because you may be held responsible for an injury. For example, a wobbly or broken step or loose handrail could cause a tenant to fall.

Let’s Customize Your Landlord Liability Coverage

Let’s Customize Your Landlord Liability Coverage

Whether you’re renting out a vacation home, a duplex, or a multi-unit apartment complex, you need adequate liability protection as the landlord. Your liability insurance protects your rental property and other financial assets in case of claims made against you. Contact our team at IRM Insurance for a customized landlord liability insurance policy that meets your needs.

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