Public Liability Insurance For Landlords Explained

If you rent out a home, you can rely on your landlord's buildings and contents insurance to cover the cost of any mishaps - but who pays the bill if someone is injured or their belongings are damaged because of something that’s a landlord’s responsibility? 

Public liability insurance is the answer. 

Hidden dangers in a rented home can be lethal to tenants, visitors, or tradespeople. For example, something as simple as a loose carpet or floorboard is a trip hazard that could trigger a compensation claim, resulting in a landlord paying out thousands of pounds.

Landlords owe a duty of care to anyone living at or visiting a rented home, even if they are there without permission. This duty extends to hazards a landlord should have known about and defects reported by tenants.

What is public liability insurance?

Landlord public liability insurance pays the bill if someone makes a claim against you for injury or damage caused to their possessions while at your rented home. The costs include your solicitor’s fees, any compensation awarded and the other party’s legal fees. 

The Defective Premises Act 1972 says landlords must take reasonable steps to protect tenants and others visiting a property from harm from any defects at the property. 

More legislation - The Homes (Fitness For Human Habitation) Act 2018 - demands landlords make sure their rental properties are fit for tenants to live in. This law covers several issues:

• Exposure to carbon monoxide and lead
• Providing heating
• Avoiding personal injury
• Keeping windows and stairwells safe
• providing enough lighting

Like most insurance, public liability cover gives peace of mind to landlords that they are protected financially should something happen as covered by the terms.

Four reasons landlords need public liability insurance

There’s no law demanding landlords have public liability cover, but there are four good reasons why taking out a policy should be considered:

• Cover offers you and your tenant confidence that if a claim is made, the landlord can afford to settle without going bankrupt
• Personal injury claims are becoming more common and easier to make thanks to endless advertising by lawyers willing to pursue a no-win-no-fee claim.
• Keeping a rental home safe for tenants is a significant responsibility for landlords. If a problem arises that could cause injury to someone else; you could be held liable for medical costs, loss of earnings, and other expenses related to the case. This bill can soon escalate into many thousands of pounds.
• Public liability insurance also covers damage to someone else’s possessions if they are damaged or destroyed at a rental property, like a TV or electrical goods damaged when a pipe leaks.

Typical claims involve unrepaired leaks, uneven pathways leading to slips or trips and ill-fitting or loose carpets and rugs. If you do not have public liability cover, landlords are responsible for covering a claim out of their pockets.

Who can make a public liability claim?

Public liability insurance is wide-ranging and allows anyone living at a rental property to make a claim and any visitor to the home. For example, that could include your tenant or their children, guests, tradespeople, and delivery people.

How much is public liability cover?

Public liability cover is one of the cheapest landlord insurances. Expect to pay between £40 to £60 a year for the policy. Many insurers bundle the cover into general landlord insurance policies, including buildings insurance and landlord content protection.

How to buy public liability insurance

If you are looking for public liability insurance, shop for a quote. Consider these factors when comparing a quote:

• Different companies offer varying cover levels - usually £1 million, £5 million or £10 million. How much cover you need depends on the property.
• How long the cover lasts - typically,  policies last for a year but can cover shorter or longer periods.
• If you are shopping for a new provider, remember to ask your current insurer how much no claims bonus you can switch to reduce the cost.
• Don’t confuse public liability with professional indemnity cover - they are different, and landlords don’t normally need indemnity insurance.
• Buying a policy that covers a portfolio rather than several standalone policies is often cheaper.

Disrepair and public liability claims

More tenants are seeking compensation from landlords for inconvenience or stress resulting from disrepair in their rented homes. Although failing to maintain a property is not an insurable claim, injury complaints or damage to property are becoming more common as accident injury lawyers look for other revenue streams as new court rules limit road accident pay-outs. 

A common complaint is dampness in a rented home. The landlord must keep homes damp-free and accept liability while making the appropriate repairs. Accepting liability then opens the door to further claims for respiratory illnesses caused by the damp from the tenant and their family. 

Very quickly, a straightforward disrepair issue mushrooms into a compensation claim. Insurers suggest landlords should regularly inspect homes for damp and keep records of complaints and how they were dealt with. Dealing with disrepair at an early stage circumvents what could become an expensive later claim.

Difference between disrepair and public liability

Disrepair covers inconvenience, loss or stress resulting from a landlord failing to properly maintain a property according to safety legislation or the terms of a tenancy agreement. 

Only a tenant can bring a claim against a landlord. Public liability claims arise from a landlord’s failure to carry out repairs. In addition, anyone allegedly suffering illness, injury or loss can make a claim.